Assets= 36,000,000 liabilities 19,000,000 shareholders equity 17,000,000 unit sales forecast 1,500,000 average product sales price 75.00 unit costs of goods sold 55.00 fixed expenses (GSA) 12,500,000
Upsilon outsources it marketing operations to an exclusive sales agent that earns no salary but a 10% flat commission on all sales. The agent does not take a title to Upsilion’s products. The agent’s commission earning are reported as an operating expense on Upsilon’s income state. Upsilon’s operating consists only of the fixed op. expenses and the commissions paid to its marketing agent.
1. How many units of product must be sold for Upsilon to break even? And how much sales revenue would the break even level of units sales generate?