Question
Breakeven Point and Operating Income You are given the following information: Full Ton Company Financial Projection for Product USA For the Year Ended December 31,
Breakeven Point and Operating Income
You are given the following information:
Full Ton Company
Financial Projection for Product USA
For the Year Ended December 31, 20X2
Sales (100 units at $100 a unit)...............................................$10,000
Manufacturing cost of good sold
Direct Labor...............................$1,500
Direct Materials Used................$1,400
Variable Factory Overhead........$1,000
Fixed Factory Overhead............$500
Total Manufacturing cost of goods sold.................................$4,400
Gross Profit...........................................................................$5,600
Selling Expenses:
Variable..................................$600
Fixed......................................$1,000
Administrative Expenses:
Variable..................................$500
Fixed......................................$1,000
Total Selling and Administrative expenses............................$3,100
Operating Income..................................................................$2,500
Required:
1. How many units of Product USA would have to be sold to break even?
2. What would be the operating income be if sales increase by 25%?
3. What would be the dollar sales at the breakeven point if fixed factory overhead increases by $1,700?
A detailed workthrough on how to solve each requirement would be super helpful; not sure how to get started on them. Thanks!
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