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 $10,000 (100 units at $100 a unit )
Manufacturing costs of goods sold: Direct Labor $1,500 Direct Materials Used $1,400 $1,350 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
Requirements: (Must show all calculations)
1. How many units of Product USA would have to be sold to break even?
2. What would the operating income be if sales increase by 25%?
3. What would be the dollar sales at the breakeven point if fixed factory overhead increased by $1,700?
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