Breakeven Analysis remember to check your anaswer The Lattin Companies produces and sells pens. Currently 5,000,000 pens are sold per year at $0.50 per pen. Fixed costs are $900,000 per year. Variable costs are $0.20 per pen.

3A What is the operating income before taxes?

3B What is the sales quantity needed to breakeven or zero profit?

3C What must the unit variable cost be in order to make profit before taxes of $400,000 based on the following assumptions: Selling price - $0.50 Sales quantity 6,000,000 Fixed costs - $800,000

3D Lattin wants to generate $120,000 in Net Income after Taxes for next year, what does the unit selling price need to be? The tax rate is 40%. Sales quantity - 5,000,000 Unit Variable Cost - $0.30 Fixed Costs - $900,000