Breed Products has performed extensive studies on its costs and production and estimates the following annual costs based on 150,000 units (produced and sold):
Total Annual Costs (150,000 units)
Direct Material $200,000
Direct Labor $180,000
Manufacturing overhead $150,000
Selling, general, and administrative $100,000
Total = $630,000
a) Compute Breed's unit selling price that will yield a profit of $600,000, given sales of 150,000 units
b) Compute Breed's dollar sales that will yield a projected 20% profit on sales, assuming variable costs per unit are 60% of the selling price per unit and fixed costs are $225,000
c) Management believes that a selling price of $9 per unit is reasonable given current market conditions. How many units must Breed sell to generate the revenues (dollar sales) determined in requirement (b) ?
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