Problem
Lindon Company is the exclusive distributor for an automotive product that sells for $47.00 per unit and has a CM ratio of 34%. The company's fixed expenses $207,740 per year. The company plans to sell 14,000 units this year.
Required:
1. What are the variable expenses per unit?
2. Use the equation method:
a. What is the break-even point in unit sales and in dollar sales?
b. What amount of unit sales and dollar sales is required to earn an annual profit of $79?