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Nighthawk Company's Income Statement for the Year Ended December 31, 2021 Sales (200,000 units) $1,200,000 Policies 700.000 Cost of goods sold Gross profit 500,000 Operating
Nighthawk Company's Income Statement for the Year Ended December 31, 2021 Sales (200,000 units) $1,200,000 Policies 700.000 Cost of goods sold Gross profit 500,000 Operating expenses Selling $300,000 Administrative 275.000 575.000 Net loss $ 175,000) A cost behavior analysis indicates that 70% of the cost of goods sold are variable, 45% of the selling expenses are variable, and 40% of the administrative expenses are variable. Rounding Instructions - Round FINAL variable cost to 2 decimal, FINAL break even answers to unit and dollar. Format: Prepare parts 2 and 3 in CVP income statement format and show all computations using formulas in excel or google sheets for ALL calculations 1. Using the income statement above, compute the break-even point in total sales dollars and in units for 2021. PLANA - Tom has proposed a plan to improve its profitability. Tom feels that the quality of the product could be substantially improved by spending $0.25 more per unit on better raw materials. The selling price per unit could be increased to $6.25. Tom estimates that sales volume will increase by 20%. Compute net income under Tom's proposal and the break-even point in dollars. (DO NOT Round the contribution margin ratio.)
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