Hixson Company manufactures and sells widgets at $34 per unit. When the company produces and sells 25,000 units the costs are as follows:

Amount per Unit

Direct Materials $8.00

Direct Labor $5.00

Variable Manufacturing Overhead $1.00

Fixed Manufacturing Overhead $6.00

Fixed Selling Expense $3.50

Fixed Administrative Expenses $2.50

Sales Commissions $4.00

Variable Administrative Expenses $1.00

6. To make a profit of $50,000 how many units will need to be sold? (round to the nearest unit)

7. What will be net operating income under absorption costing for the first year of operations?

8. What will be net operating income under variable costing for the first year of operations?