Daley Co. manufactures computer monitors. Following is a summary of its basic cost and revenue...
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Accounting
Daley Co. manufactures computer monitors. Following is a summary of its basic cost and revenue data:
Sales price per unit
$ 100
Variable direct material per unit
$ 50
Variable direct labor per unit
$ 15
Variable sales commission per unit
$10
Fixed salaries
$ 200,000
Fixed Rent
$ 150,000
Fixed advertising
$ 50,000
Requirement:
1. Calculate the annual breakeven point, both in terms of units and in terms of sales dollars
2. If Daley sells 20,000 monitors, what is the income or loss.
3. If Daley sells 35,000 monitors, what is its margin of safety in units and margin of safety ratio?
4. Daley is considering the elimination of sales commission completely and increasing salaries by $ 130,000. What would be the new breakeven point in dollars? What would be the income or loss if 20,000 monitors are sold with the new salary plan?
or loss if 20,000 monitors are sold with the new salary plan?
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