1)Farmers Industries has fixed costs of $300,000 and variable costs are 60% of sales. How much will Farmers report as sales when its net income equals $30,000?

2)Murphy Company produces flash drives for computers, which it sells for $20 each. Each flash drive costs $8 of variable costs to make. During April, 700 drives were sold. Fixed costs for April were $4 per unit for a total of $2,800 for the month. How much does Murphy's operating income increase for each $1,000 increase in revenue per month?

3)In 2011, Raleigh sold 1,000 units at $500 each, and earned net income of $50,000. Variable expenses were $300 per unit, and fixed expenses were $150,000. The same selling price is expected for 2012. Raleigh's variable cost per unit will rise by 10% in 2012 due to increasing material costs, so they are tentatively planning to cut fixed costs by $15,000. How many units must Raleigh sell in 2012 to maintain the same income level as 2011?

4)Brooks Corporation can sell all the units it can produce of either Plain or Fancy but not both. Plain has a unit contribution margin of $120 and takes two machine hours to make and Fancy has a unit contribution margin of $150 and takes three machine hours to make. There are 2,400 machine hours available to manufacture a product. What should Brooks do?

Make Plain which creates $10 more profit per machine hour than Fancy does.

The same total profits exist regardless of which product is made.

Make Plain because more units can be made and sold than Fancy.

Make Fancy which creates $30 more profit per unit than Plain does.