Breed Products has performed extensive studies on its costs andproduction and estimates the following annual costs based on165,000 units (produced and sold):
| Total Annual Costs
(165,000 units) |
| Direct material | $ | 282,000 | |
| Direct labor | | 255,000 | |
| Manufacturing overhead | | 216,000 | |
| Selling, general, andadministrative | | 139,000 | |
| Total | $ | 892,000 | |
|
Required:
a. Compute Breed’s unit selling price that willyield a profit of $560,000, given sales of 165,000 units.(Round your answer to 2 decimal places.)
b. Compute Breed’s dollar sales that will yielda projected 20 percent profit on sales, assuming variable costs perunit are 50 percent of the selling price per unit and fixed costsare $651,000.
c. Management believes that a selling price of$7.80 per unit is reasonable given current market conditions. Howmany units must Breed sell to generate the revenues (dollar sales)determined in requirement (b)? (Round your finalanswer to nearest whole unit.)
