2.(12 points) Perkins Company produces and sells a single product. The company's income statement for the...

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2.(12 points) Perkins Company produces and sells a single product. The company's income statement for the most recent month is given below: Sales (18,000 units at $30 per unit) ....... $540,000 Less variable costs: Direct materials (variable) $90,000 Direct labor (variable)....... 126,000 Variable factory overhead.... 80,000 Variable selling and other expenses 64,000 360.000 Contribution margin....... 180,000 Less fixed expenses: Fixed factory overhead....... 60,000 Fixed selling and other expenses.... 85,000 145,000 Net operating income... $ 35.000 There are no beginning or ending inventories. Required: a. Compute the company's break-even point in units and sales dollars. b. What would the company's monthly net operating income be if sales and total variable costs increased by 30% and total fixed factory overhead dropped by $30,000? c. What total level of sales (in units) must the company achieve in order to earn a target profit of $95,000? d. The company has decided to automate a portion of its operations. The change will reduce direct labor costs per unit by 50 percent, but it will double the costs for fixed factory overhead. Every other cost remains unchanged. Compute the new break-even point in units. 2.(12 points) Perkins Company produces and sells a single product. The company's income statement for the most recent month is given below: Sales (18,000 units at $30 per unit) ....... $540,000 Less variable costs: Direct materials (variable) $90,000 Direct labor (variable)....... 126,000 Variable factory overhead.... 80,000 Variable selling and other expenses 64,000 360.000 Contribution margin....... 180,000 Less fixed expenses: Fixed factory overhead....... 60,000 Fixed selling and other expenses.... 85,000 145,000 Net operating income... $ 35.000 There are no beginning or ending inventories. Required: a. Compute the company's break-even point in units and sales dollars. b. What would the company's monthly net operating income be if sales and total variable costs increased by 30% and total fixed factory overhead dropped by $30,000? c. What total level of sales (in units) must the company achieve in order to earn a target profit of $95,000? d. The company has decided to automate a portion of its operations. The change will reduce direct labor costs per unit by 50 percent, but it will double the costs for fixed factory overhead. Every other cost remains unchanged. Compute the new break-even point in units.