For the current year ending March 31, Ewok Company expects fixed costs of $740,000, a unit variable cost of $55, and a unit selling price of $80.

Question

For the current year ending March 31, Ewok Company expects fixed costs of $740,000, a unit variable cost of $55, and a unit selling price of $80.

a. Compute the anticipated break-even sales (units).
units

b. Compute the sales (units) required to realize income from operations of $140,000.
units

Answer 1

a) unit margin = 80-55 =25

break-even = 740000/25 = 29600 units

b) (740000+140000)/25 = 880000/25 = 35200