Question
Anderson Metals manufactures and sells #3 steel rebar that is used in the construction of slabs and driveways.The steel bar not only strengthens the finished
Anderson Metals manufactures and sells #3 steel rebar that is used in the construction of slabs and driveways.The steel bar not only strengthens the finished concrete product, but it also has unique properties such that its temperature related expansion and contraction matches that of concrete.The product is manufactured and sold+1:11formation for 2020 is as follows:
Sales were $30,000,000, consisting of 5,000,000 sticks.
Total variable costs were $18,000,000.
Total fixed costs were $10,000,000.
Net income was $2,000,000.
The general economic conditions appear to be deteriorating heading into 2021, and there is some concern about a reduction in sales volume.The following questions should each be answered independent of one another. . An income statement must be presented for each scenario to receive credit!
Use the income statement you prepared in (a) above to answer the question: What is the company's breakeven point in sticks?
(a) What is the company's break-even point in "sticks?"
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