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Mercy, a leading firm in the sports industry, produces basketballs for the consumer market. For the year ended December 31 , 2020 , Mercy sold
Mercy, a leading firm in the sports industry, produces basketballs for the consumer market. For the year ended December 31 , 2020 , Mercy sold 200,900 basketballs at an average selling price of $26 per unit. The following information also relates to 2020 (assume constant unit costs and no variances of any kind): (Click the icon to view the 2020 data.) Read the requirements. Requirement 1. Calculate the breakeven point (in basketballs sold) in 2020 under: (a) Variable costing and (b) Absorption costing. a. Calculate the breakeven point in units under variable costing. Data table Requirements 1. Calculate the breakeven point (in basketballs sold) in 2020 under: a. Variable costing b. Absorption costing 2. Suppose direct materials costs were $10 per basketball instead. Assuming all other data are the same, calculate the minimum number of basketballs Mercy must have sold in 2020 to attain a target operating income of $170,000 under: a. Variable costing b. Absorption costing
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