Breakeven Analysis and Planning Future Sales

Jun 1st, 2014
Price: $15 USD

Question description

Prepare breakeven analysis and a C-V-P analysis planning future sales using the information below. (

Write Company has a maximum capacity of 200,000 units per year. Variable manufacturing costs are $12 per unit. Fixed overhead is $600,000 per year. Variable selling and administrative costs are $5 per unit, and fixed selling and administrative costs are $300,000 per year. The current sales price is $23 per unit.


  1. What is the breakeven point in (a) sales units and (b) sales dollars?
  2. How many units must Write Company sell to earn a profit of $240,000 per year?
  3. A strike at one of the company's major suppliers has caused a shortage of materials, so the current year's production and sales are limited to 160,000 units. To partially offset the effect of the reduced sales on profit, management is planning to reduce fixed costs to $841,000. Variable cost per unit is the same as last year. The company has already sold 30,000 units at the regular selling price of $23 per unit.

    1. What amount of fixed costs was covered by the total contribution margin of the first 30,000 units sold?
    2. What contribution margin per unit will be needed on the remaining 130,000 units to cover the remaining fixed costs and to earn a profit of $210,000 this year?

2 pages min that are graduate level apa formatted

Original Work as I check everyone submitted

Tutor Answer

(Top Tutor) Daniel C.
School: New York University

Studypool has helped 1,244,100 students

Review from our student for this Answer

Jun 2nd, 2014
"Thanks, good work"
Ask your homework questions. Receive quality answers!

Type your question here (or upload an image)

1828 tutors are online

Brown University

1271 Tutors

California Institute of Technology

2131 Tutors

Carnegie Mellon University

982 Tutors

Columbia University

1256 Tutors

Dartmouth University

2113 Tutors

Emory University

2279 Tutors

Harvard University

599 Tutors

Massachusetts Institute of Technology

2319 Tutors

New York University

1645 Tutors

Notre Dam University

1911 Tutors

Oklahoma University

2122 Tutors

Pennsylvania State University

932 Tutors

Princeton University

1211 Tutors

Stanford University

983 Tutors

University of California

1282 Tutors

Oxford University

123 Tutors

Yale University

2325 Tutors