Ask Experts Questions for FREE Help !
    tammylynn13's Avatar
    tammylynn13 Posts: 1, Reputation: 1
    New Member

    Dec 7, 2013, 04:38 PM
    How do you figure out annual unit sales volume?
    I have been searching for a formula to determine the annual unit sales volume at which it would be indifferent between two manufacturing methods and have been unsuccessful.
    ebaines's Avatar
    ebaines Posts: 12,131, Reputation: 1307

    Dec 8, 2013, 07:16 AM
    Assuming by "indifferent" you mean that both manufacturing techniques yield the same gross profit, and assuming that selling price isn't affected, then what you want is the point where (price - cost per unit) times volume is the same for both processes. If C_1 = average cost of manufacture per piece for method 1 and C_2 is average cost per piece for method 2, then:

    (P-C_1) V_1 = (P-C_2) V_2


    V_2 = (P-C_1)V_1/(P-C_2)

Not your question? Ask your question View similar questions


Question Tools Search this Question
Search this Question:

Advanced Search

Add your answer here.

Check out some similar questions!

Determine the annual unit sales volume at which Martinez Company would be indifferent [ 1 Answers ]

Direct material $5 per unit(capital intensive) Direct material $5.50 per unit (labor intensive) Direct labor $6 per unit (capital intensive) Direct material $8.00 per unit(labor intensive) Variable overhead $3 per unit (capital intensive) Variable overhead $4.50 per unit (labor expense)...

Annual sales and ACP [ 1 Answers ]

A company's had a quick ratio of 1.4, a current ratio of 3.0, an inventory turnover of 6 times, total current assets of $675,000, and cash and marketable securities of $100.000 in 2007. What were the company's annual sales and its ACP for that year?

Calculate annual sales figure [ 1 Answers ]

Winnebagel Corp. currently sells 39,000 motor homes per year at $58,500 each, and 15,600 luxury motor coaches per year at $110,500 each. The company wants to introduce a new portable camper to fill out its product line; it hopes to sell 27,300 of these campers per year at $15,600 each. An...

Annual sales [ 3 Answers ]

How to calculate annual sales?:)

Figure annual mortgage rate [ 1 Answers ]

Show table for annual mortgage rate of 12% on $70,000

View more questions Search