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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:
- 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:
- Prepare a projected contribution type income statement based on the 2022 estimates .
Newton Cellular Projected Income Statement for year ending Dec 31,2022 | |
- Compute the break-even in units and in sales dollars for 2022.
- How many units is Newton planning to sell in 2022?
- How many additional units must be sold in 2022 to break-even?
- 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 |
- What is the contribution margin ratio?
- What is the break-even point in sales dollars?
- If the company is operating at a $100,000 loss what are the dollar sales?
- If the company is operating at a $100,000 profit what are the dollar sales?
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