COST-VOLUME-PROFIT ANALYSIS PROBLEM
Mirabelle Metals Co. makes a single product that sells for $35 per unit. Variable costs
are $20 per unit, and fixed costs total $45,000.
REQUIRED:
A. Calculate the number of units that must be sold for the company to break even.
B. Assume current sales are $210,000, calculate operating income.
C. Calculate operating income if 8,000 units are sold.
D. Calculate operating income if the selling price is raised to $40, fixed costs are
increased by $ 15,000 and sales volume becomes 5,000 units.
E. Calculate operating Income if the selling price is lowered to $30, fixed costs are
decreased by $5,000 and sales volume becomes 6,000 units.