You have been provided with the following information regarding the Closure Manufacturing Company: Sales Price$50Variable manufacturing cost per unit 24Fixed manufacturing costs per unit 12Variable marketing cost per unit 6Fixed administrative costs per unit 3This information is based on forecasted sales of 33,000 units.Required:(a) What is the expected operating profit for the upcoming year?(b) What is the break-even point in dollars?(c) How much in sales dollars is required to generate an operating profit of $275,000?
What will be an ideal response?
(a)
[($50 ? $24 ? $6) × 33,000] ? (($12 + $3) × 33,000) = $165,000.
(b)
$495,000/(($50 ? $30)/$50) = $1,237,500.
(c)
($495,000 + $275,000)/0.4 = $1,925,000.
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