In the past year, the Greenwood Corporation had sales of $1,200,000, fixed costs of $400,000, and total variable costs of $600,000.
a. At what sales figure would Greenwood have broken even last year?
b. If sales increase by 15% in the year ahead (but all prices remain the same), how much (in $) will the net income increase?
c. If fixed costs are 10% lower in the year ahead (but sales and variable costs remain the same as last year), how much (in $) will the net income increase?
d. If variable costs are 10% higher in the year ahead (but sales and fixed costs remain the same as last year), how much (in $) will the net income decrease?