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Break-Even in Units, Target Income, New Unit Variable Cost, Degree of Operating Leverage, Percent Change in Operating Income Reagan, Inc., has developed a chew-proof
Break-Even in Units, Target Income, New Unit Variable Cost, Degree of Operating Leverage, Percent Change in Operating Income Reagan, Inc., has developed a chew-proof dog bed-the Tuff-Pup. Fixed costs are $192,000 per year. The average price for the Tuff- Pup is $37, and the average variable cost is $25 per unit. Currently, Reagan produces and sells 20,000 Tuff-Pups annually. Required: 1. How many Tuff-Pups must be sold to break even? units 2. If Reagan wants to earn $66,000 in profit, how many Tuff-Pups must be sold? units Prepare a variable-costing income statement to verify your answer. Reagan, Inc. Variable-Costing Income Statement
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