Jay-Zee Company makes an in-car navigation system. Next year, Jay-Zee plans to sell 16,000 units at a price of $320 each. Product costs include:
Variable selling expense is a commission of 5 percent of price; fixed selling and administrative expenses total $116,400.
1. Calculate the sales commission per unit sold.
Calculate the contribution margin per unit.
2. How many units must Jay-Zee Company sell to break even?
Prepare an income statement for the calculated number of units. If an amount is zero, enter "0".
3. Calculate the number of units Jay-Zee Company must sell to achieve target operating income (profit) of $333,408.
4. What if the Jay-Zee Company wanted to achieve a target operating income of $322,000? Would the number of units needed increase or decrease compared to your answer in Requirement 3?
Compute the number of units needed for the new target operating income.