For the Past Year,Cline Company Had Fixed Costs of $6,552,000,a

question 65

Essay

For the past year,Cline Company had fixed costs of $6,552,000,a unit variable cost of $444,and a unit selling price of $600.For the coming year,no changes are expected in revenues and costs except that a new wage contract will increase variable costs by $6 per unit.Determine the break-even sales (in units)for (a)the past year and (b)the coming year.

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Definitions:

Channel Members

Channel members refer to the set of intermediaries that a product passes through from production to final sale, including wholesalers, distributors, and retailers.

Services Perform

The process of executing or delivering a service to fulfill a need or requirement of a customer.

Markup

The amount added to the cost price of goods to cover overhead and profit; the percentage increase on the original cost.

Selling Price

The final price at which a product or service is sold to the customer, taking into account costs, profit margins, and market demand.