COST-VOLUME-PROFIT EQUATION, BASIC CONCEPTS, SOLVING FOR UNKNOWNS Nutri-Tress Company produces combination shampoos and conditioners in individualuse bottles for hotels. Each bottle sells for $0.36. The variable costs for each bottle

(materials, labor, and overhead) total $0.27. The total fixed costs are $58,500. During the most recent year, 830,000 bottles were sold.

Required:

. What is the break-even point in units for Nutri-Tress? What is the margin of safety in units for the most recent year?

. Prepare an income statement for Nutri-Tress’s most recent year.

. How many units must be sold for Nutri-Tress to earn a profit of $36,000?

. What is the level of sales dollars needed for Nutri-Tress to earn operating income of 20 percent of sales?

Problem