Answered

Discover a world of knowledge at Westonci.ca, where experts and enthusiasts come together to answer your questions. Experience the ease of finding reliable answers to your questions from a vast community of knowledgeable experts. Our platform provides a seamless experience for finding reliable answers from a network of experienced professionals.

Principal Printing produces custom labels and stationery for companies. In conducting CVP analysis of its Personalized Package, management decided to determine how many of the packages would need to be sold in order to justify continuing the product line. Management determined that fixed costs direct related to this particular product amounted to $54,000 annually. Principal reported $240,000 of gross sales related to this product and variable product costs of $180,000. Assuming that each Personalized Package sells for $12 per unit, what is the minimum amount of total sales dollars of Personalized Packages that Principal needs in order to justify the product line

Sagot :

Tundexi

Answer:

18,000 personalized packages

Explanation:

Profit-volume ratio = ($240,000 - $180,000) / $240,000

Profit-volume ratio = 0.25

Profit-volume ratio= 25%

Break-Even-Point = $54,000 / 25%

Break-Even-Point = 216,000

The minimum personalized packages that needs to sell to break even:

= Break-Even-Point /  Personalized Package sales per unit

= 216,000 / $12

= 18,000 personalized packages

We hope you found what you were looking for. Feel free to revisit us for more answers and updated information. We hope this was helpful. Please come back whenever you need more information or answers to your queries. Thank you for trusting Westonci.ca. Don't forget to revisit us for more accurate and insightful answers.