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Newton Cellular manufactures and sells the Top Line cellphone. For the year 2022 Newton has estimated the following: Required: Prepare a projected contribution type income

Newton Cellular manufactures and sells the Top Line cellphone. For the year 2022 Newton has estimated the following:

Required:

  1. Prepare a projected contribution type income statement based on the 2022 estimates .
Contribution margin per phone $200
Variable cost per cell phone $450
Annual fixed costs - Total $180,000
Net loss ($400)

Required:

  1. Prepare a projected contribution type income statement based on the 2022 estimates .

Newton Cellular

Projected Income Statement for year ending Dec 31,2022

  1. Compute the break-even in units and in sales dollars for 2022.

  1. How many units is Newton planning to sell in 2022?

  1. How many additional units must be sold in 2022 to break-even?

  1. How many units need to be sold to earn $100,000 before tax?

Given:

Variable cost as a % of sales 70%
Annual fixed costs - Total $600,000

  1. What is the contribution margin ratio?

  1. What is the break-even point in sales dollars?

  1. If the company is operating at a $100,000 loss what are the dollar sales?

  1. If the company is operating at a $100,000 profit what are the dollar sales?

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