(Break-even

point and selling

price)

Simple Metal Works, Inc. will manufacture and sell

200 comma 000

units next year. Fixed costs will total

$250 comma 000

,

and variable costs will be

50

percent of sales.

a. The firm wants to achieve a level of earnings before interest and taxes of

$280 comma 000

.

What selling price per unit is necessary to achieve this result?

b. Set up an analytical income statement to verify your solution to part

(a).