Question
A company sold a total of 1,000 units for total sales revenue of $70,000. The company incurred total variable expenses of $38,500 and total fixed
A company sold a total of 1,000 units for total sales revenue of $70,000.
The company incurred total variable expenses of $38,500 and total fixed expenses of $ 23,310.
Based on this, the company reported a total contribution margin of $31,500 and net operating income of $ 8,190.
Use this information to answer the following questions. Assume that all units are within the relevant range.
1 Calculate the net operating income if the variable cost per unit increases by $1, spending on fixed costs increases by $1,600, and unit sales increase by 220 units.
2 Calculate the break-even point in unit sales.
3 Calculate the break-even point in unit sales.
4 Calculate the number of units that must be sold to earn a target profit of $18,900.
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