Break Even Point and Target Income
If Someone could please help me. I'm not looking for the answer just need to know how to do this
Direct Materials $5 per unit
Direct Labor $8 per unit
Variable Manufacturing overhead $3 per unit
Variable selling and administrative expenses $2 per unit
Fixed Expenses $80,000
1. Assuming that Newman will sell 55,000 units. What sales price per unit will be needed to achieve a $75,000 profit?
2. Assuming that Newman decides to see its product for $23 per unit, dermine the break even sales volume in dollars and units
3. Assuming that Newman decides to sell its product for $23 per unit, determine the number of units it must sell to generate a $100,000 profit.
I am guessing that based off the CVP equation = sales -variable = contribution = fixed costs-proft.
I think that I would take all of the variable costs X Fixed costs. So my example would be
Direct Materials $5 per unit x 80,000 = 4000
Direct Labor $3 per unit x 80,000 = 2400
After adding all of the Variable Cost together then subtract from Fixed Expense? Am I heading in the right direction? PLEASE HELP!!