Break-Even and Net Income Planning Hank Company has recently leased facilities for the manufacture of a new product. Based on studies made by its accounting personnel, the following data are available: Estimated annual sales: 20,000 units Amount Unit Cost $345,000 $17.25 328,000 $16.40 Manufacturing overhead 196,000 $9.80 Administrative expenses 124,000 $6.20 $993,000 $49.65 Estimated Costs: Direct materials Direct labor Selling expenses are expected to be 10% of sales, and the selling price is $71.00 per unit. Ignore income taxes in this problem. a. Compute a break-even point in dollars and in units. Assume that manufacturing overhead and administrative expenses are fixed, but that other costs are variable. Use the contribution margin ratio percent, rounded to one decimal place, in your calculation of break-even in sales dollars. Round final answers to whole numbers. Break-even In units 10,579 In sales $ 751,068 b. What would net income before income tax be if 30,000 units were sold? $ 1,013,500 X c. How many units must be sold to earn a net income before income tax of 10% of sales? TIP: Determine the minimum number of units assuming Hank does not sell partial units. 8,568 x OT

Break-Even and Net Income Planning tank Company has recenty leased facilities for the manufacture of a new product. Based on studies made by its accounting personinel, the following data ate avaliabie: Citimoted anncial sales 20,000 uniss Seling expenses are expected to be 10% of sales, and the selling price is $71.00 per unit. ignore income taxes in this problem. a. Compute a break tven point in dollars and in units. Assume that manufacturing overhead and admenistrative expenses are fised, but chat other costs are varbble. Use the contribution margan ratis perchet, rounded to one decimal place. in your calculation of break even in sales dotlars Hound final answers to whole numbers. b. Whut would net income before income tax be if 00,000 units were soid? c. How many units mus be sold to eam a net income before income zar of 10h of sales? TiP: Deteimine the minimum number of units assuming Fank does not sell partial units