You have been provided with the following information regarding the Fremont Manufacturing Company: Sales price$50Variable manufacturing cost per unit 24Variable marketing cost per unit 6Fixed manufacturing costs 360,000Fixed administrative costs 80,000This 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] ? ($360,000 + $80,000) = $220,000.
(b)
$440,000/(($50 ? $30)/$50) = $1,100,000.
(c)
($440,000 + $275,000)/0.4 = $1,787,500.
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