Determine the number of units that Quebec sold in excess of its break-even point. If current revenue and cost patterns continue, compute the dollar sales needed next year to produce a target income of $492,000
SALES PRICE – 60000+COMMISSION (UNITS SOLD X SALES PRICE)X0.09 –PRESENT SALARY.
When I try to figure this out, I am not getting the same total that the video is showing. Am I missing something?
Break-even and other CVP analysis
Quebec Inc. manufactures and sells a single product. The information that follows relates to the year just ended, when 230,000 units were sold:
Sales price per unit $ 10
Variable cost per unit 4.75
Fixed costs 930,000
Instructions
Determine the number of units that Quebec sold in excess of its break-even point.
If current revenue and cost patterns continue, compute the dollar sales needed next year to produce a target income of $492,000.
Assume that a different compensation plan was in effect during the current year. Rather than pay six salespeople an average salary of $36,000 each, management has proposed that the salespeople receive a $10,000 base salary and a 0.09 commission based on gross sales.
1) Would the company have been better off financially if the new plan had been adopted for the year just ended? By how much?
2) What effect might paying a commission have on gross sales? Briefly explain.
In addition to the compensation plan described in part (c), Quebec is studying the impact of other operating changes as well. State whether you agree or disagree with the following findings of a newly hired staff accountant:
1) A rise in property taxes will increase the break-even point.
2) A decrease in raw material cost will increase the contribution margin and decrease total fixed costs.
Looking for a Similar Assignment? Order now and Get 10% Discount! Use Coupon Code "Newclient"
