Preparing a break-even analysis; forecasting net income or net loss. The Stanley Manufacturing Company produces one product,
Question:
Preparing a break-even analysis; forecasting net income or net loss. The Stanley Manufacturing Company produces one product, which is sold at a fixed price of $30 per unit. For the year 19X1, the company operated at full capacity and a total of 40,000 units were sold. The company’s fixed costs totaled
$40,000, and the variable costs for the yéar were $960,000.
Instructions 1. Compute the company’s break-even sales in units and in dollars.
2. Prepare a simple break-even chart.
3. How many units must be sold to make a net income of $80,000?
4. Assume that the company has forecast a net loss of $24,000 in 19X2. If all the other data given are correct, how many units are forecast to be sold in 19X2?
Step by Step Answer:
Cost Accounting Principles And Applications
ISBN: 9780070081529
5th Edition
Authors: Horace R. Brock