APPLY THE CONCEPTS: Calculate the break-even point in sales dollars for Clapton Industries

Further analysis of Clapton Industriess fixed costs revealed that the company actually faces annual fixed overhead costs of $4,200 and annual fixed selling and administrative costs of $1,800. Variable cost estimates are correct: direct materials cost, $24.00 per unit; direct labor costs, $30.00 per unit; and variable overhead costs, $6.00 per unit. At this time, the selling price of $80 will not change. Complete the following formulas for the revised fixed costs. Enter the ratio as a percentage.

Contribution Margin per Unit=$fill in the blank 5cdcdd07afc6060_1$fill in the blank 5cdcdd07afc6060_2=$fill in the blank 5cdcdd07afc6060_3

Contribution Margin Ratio=$fill in the blank 5cdcdd07afc6060_4=fill in the blank 5cdcdd07afc6060_5 %$fill in the blank 5cdcdd07afc6060_6

Now complete the formulas for (1) the break-even point in sales dollars and (2) the units sold at the break-even point. To calculate this, divide the break-even point in sales dollars by the unit selling price.

Break-Even Point in Sales Dollars=$fill in the blank 5cdcdd07afc6060_7=$fill in the blank 5cdcdd07afc6060_8fill in the blank 5cdcdd07afc6060_9 %

Units Sold at Break-Even Point=fill in the blank 5cdcdd07afc6060_10 units

Assume that the number of units that Clapton sold exceeded the break-even point by one (1).

How much would operating income be? $fill in the blank 5cdcdd07afc6060_11

What would operating income be if the units sold exceeded the break-even point by five (5) units? $fill in the blank 5cdcdd07afc6060_12