Preparing a break-even analysis; forecasting net income.

The Bancroft Manufacturing Company produces one product, which is sold at a fixed price of $8 per unit. The yearly fixed costs of the company total $640,000.

During the year 19X1, the company sold 500,000 units and reported a net income of $160,000.

Instructions 1. Compute the company’s break-even sales in units and in dollars.

2. Prepare a simple break-even chart.

3. Compute the sales in units needed for the company to earn a net income of

$300,000.