Parkins Company produces and sells a single product. The company's income statement for the most recent month is given below:

	Sales (6,000 units at $40 per unit)............		$240,000
	Less variable costs:
	Direct materials......................................	$48,000
	Direct labor (variable)............................	60,000
	Variable manufacturing overhead..........	12,000
	Variable selling and other Expenses	24,000	144,000
	Contribution margin..................................		96,000
	Less fixed costs:
	Fixed manufacturing overheat ..............	30,000
	Fixed selling and other expenses...........	42,000	72,000
	Net operating income................................		$ 24,000

There are no beginning or ending inventories.

Required: CLEARLY LABEL AND SHOW ALL OF YOUR WORK.

1. Compute the company's monthly break-even point in units of product.
2. What would the company's monthly net operating income be if sales increased by 25% and there is no change in total fixed expenses?
3. What dollar sales must the company achieve in order to earn a net operating income of $50,000 per month?
4. The company has decided to automate a portion of its operations. The change will reduce direct labor costs per unit by 40 percent, but it will double the costs for fixed factory overhead. Compute the new break-even point in units.

Required: CLEARLY LABEL AND SHOW ALL OF YOUR WORK.

1. Compute the company's monthly break-even point in units of product.
2. What would the company's monthly net operating income be if sales increased by 25% and there is no change in total fixed expenses?
3. What dollar sales must the company achieve in order to earn a net operating income of $50,000 per month?
4. The company has decided to automate a portion of its operations. The change will reduce direct labor costs per unit by 40 percent, but it will double the costs for fixed factory overhead. Compute the new break-even point in units.