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Category: Finance
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Experience:  Bachelors degree and CPA with Accounting experience.
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For the current year ending March 31, Jwork Company expects

Customer Question

For the current year ending March 31, Jwork Company expects fixed costs of $440,000, a unit variable cost of $50, and a unit selling price of $75.

a. Compute the anticipated break-even sales (units).
b. Compute the sales (units) required to realize income from operations of $90,000.
Submitted: 5 years ago.
Category: Finance
Expert:  JKCPA replied 5 years ago.

Thanks for your question.

a. Breakeven sales point in units = fixed costs /(sales price - variable costs) = 440,000 / (75-50)= 17,600 units.

b. Target profit point in units = (target profit + fixed costs)/(sales price - variable costs) = (90,000+440,000) / $25 = 21,200 units

Hope this helps!

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