Calculation of Break Even Unit sales of a Company

Question

In 2015, X Company had the following selling price and per-unit variable cost information:

                       Selling price                                       $153.60

                       Direct materials                                    44.60

                       Direct labor                                           27.60

                      Variable overhead                                  25.90

                      Variable selling and administrative        26.00

In 2015, fixed overhead costs were $468,000, and fixed selling and administrative costs were $279,000.

In 2016, there are only two expected changes. Direct material costs are expected to increase by 20% per unit, and fixed selling administrative costs are expected to increase by $10,000. What must unit sales be in order for X Company to break even in 2016?

Summary: This question belongs to accounting and discusses about a company’s break even unit sales using selling price and per-unit variable cost information.

Total word count: 20