Exam IIA-CIA-Part3 Topic 1 Question 1 Discussion

The breakeven point in unit sales equals total rests divided by the unit contribution margin UCM). Total fixed costs are US $1,520,640 $600,000 + 7,00 u + $352,800), and the UCM is US $33 [$4,950,000 contribution margin sales minus variable costs) -100,000 units sold]. Hence, the breakeven point in unit sales is 46,080 units US $1,520,640 + $33). Data regarding Year 1 operations for an enterprise that had no beginning or ending inventories are as follows:

The enterprise estimates that next year direct materials costs will increase by 10% and direct labor costs will increase by U' To U. unit to US $5.40 per unit. In addition, fixed selling expenses will increase by US $29,520_ All other costs will b. incurred at the same rates or amounts as the current year.