Gilbert Company had the following information:
Required:

a.
Calculate the break-even point in units using the traditional approach to CVP analysis.
b.
Calculate the break-even point in units using the activity-based costing approach to CVP analysis.
c.
Calculate the number of units that must be sold to earn a before-tax profit of £40,000.
d.
Suppose Gilbert could reduce setup costs by £300 per setup and could reduce the number of engineering hours needed to 900. How many units must be sold to break even in this case?

Question

Gilbert Company had the following information:
Required:
  
a.
Calculate the break-even point in units using the traditional approach to CVP analysis.
b.
Calculate the break-even point in units using the activity-based costing approach to CVP analysis.
c.
Calculate the number of units that must be sold to earn a before-tax profit of £40,000.
d.
Suppose Gilbert could reduce setup costs by £300 per setup and could reduce the number of engineering hours needed to 900. How many units must be sold to break even in this case?

Quizplus · Accepted Answer

The Answer of Gilbert Company had the following information:
Required:
  
a.
Calculate the break-even point in units using the traditional approach to CVP analysis.
b.
Calculate the break-even point in units using the activity-based costing approach to CVP analysis.
c.
Calculate the number of units that must be sold to earn a before-tax profit of £40,000.
d.
Suppose Gilbert could reduce setup costs by £300 per setup and could reduce the number of engineering hours needed to 900. How many units must be sold to break even in this case?

Gilbert Company Had the Following Information