Grace manufactures and sells miniature digital cameras for $250 each. 1,000 units were sold in May, and management forecasts 4% growth in unit sales each month. (a) Determine the number of units of camera sales for the month of June. (b) Determine the dollar amount of camera sales for the month of June.

a) 1040 units

b) $260,000

Explanation:

The unit price of a digital camera is $250

The number of units sold in May=1000

Growth forecast is 4%  for June

a)

Number of units in June will be that of May increased by 4%

Increase 1000 by 4 % as;

=104/100 *1000 where 104% = 100%+4%

=1040 units

b)The dollar amount of camera sales for the month of June will be

=multiply number of units in June by the units price of a digital camera

=1040*$250

=$260,000

(A) 15,625 units

(B) $1.95

Explanation:

(a) The formula to compute the break even point is shown below:

= (Fixed expenses ) ÷ (Contribution margin per unit)  

where,  

Contribution margin per unit = Selling price per unit - Variable expense per unit  

So For Oven A, the break even point would be

= ($25,000) ÷ ($2 - $0.40)

= $25,000 ÷ $1.60

= 15,625 units

(b) The computation of price is shown below:

Quantity demanded = (Fixed cost + Profit) ÷ (Price - variable cost per unit)

31,000 pens = ($25,000 + $23,000) ÷ (Price - 0.40)

31,000 pens = $48,000 ÷ (Price - 0.40)

So, the price is $1.95