Question
Noor Company produces and sells one product. The company's income statement for the most recent month is given below: 100,000 sales Subtracted from it: manufacturing
Noor Company produces and sells one product. The company's income statement for the most recent month is given below:
100,000 sales Subtracted from it: manufacturing costs: 30,000 direct articles 20000 direct labor (variable) 16,000 variable incremental manufacturing cost 5,000 fixed incremental manufacturing cost 29,000 total gross profit Less: selling expenses and other expenses: 14000 Selling expenses and other variable expenses 5000 Selling expenses and other fixed expenses 10,000 net operating income If the number of units produced and sold is 10,000, the required: a. Calculating break-even sales in monthly units of the product. B. What would the company's monthly net operating income be if sales increased by 20% and there was no change in total fixed cost? c. Referring to the basic data, what are the sales in riyals that the company must achieve in order to achieve a net operating income of 40,000 riyals per month? D-. The company decided to use new equipment, this change will lead to a decrease in direct labor costs per unit by 20%, but it will lead to an increase in fixed costs by 10%. Calculate the new break-even point in units. (find the solution by referring to the basic data)
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