Units Sold to Break Even, Unit Variable Cost, Unit Manufacturing Cost, Units to Earn Target Income
Werner Company produces and sells disposable foil baking pans to retailers for $2.25 per pan. The variable cost per pan is as follows:
Direct materials $0.24
Direct labor 0.60
Variable factory overhead 0.73
Variable selling expense 0.17
Fixed manufacturing cost totals $115,117 per year. Administrative cost (all fixed) totals $15,698.
1. Compute the number of pans that must be sold for Werner to break even.
________ pans
2. Conceptual Connection: What is the unit variable cost? What is the unit variable manufacturing cost? Round your answers to the nearest cent.
Unit variable cost $ ______
Unit variable manufacturing cost $______
3. How many pans must be sold for Werner to earn operating income of $5,049?
______ pans
4. How much sales revenue must Werner have to earn operating income of $5,049?
$______
