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Unformatted text preview: BEP = 100 / (1-375/500) BEP = 100 / (1- 0.75) BEP = 100/ 0.25 BEP = $400,000 EX 2 You are given the following data-Yearly expense: 60,000-Selling price per unit: 10.00-Yearly rent expense: 12000-Wages per unit produced: 2.25-Annual Salaries: 130000-Overhead costs per unit: 2.00-Raw materials per unit: 3.25 How many units must be sold to at least breakeven? 1. Separate fixed and variable costs-Fixed yearly lease expense, yearly rent expense, annual salaries-Variable wages per unit produced, overhead costs per unit, raw materials per unit Fixed costs: 60000 + 12000 + 130000 = 202000 Variable costs: 2.25 + 3.25 + 2.00 = 7.5 Selling price (given) = 10.00 Unit contribution = selling price VC = 2.50 B.E.P in units = FC / UC = 202,000 / 2.50 = 80,800 units...
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- Spring '08