Question
Parrott Company operates with a single product. The following simple income statement relates to last year when sales units totaled 18,000. Total $ Per unit
Parrott Company operates with a single product. The following simple income statement relates to last year when sales units totaled 18,000.
Total $ Per unit $
Sales 243,000 13.50
Variable expense 81,000 4.50
Contribution margin 162,000 9.00
Fixed expenses 49,500
Net operating income 112,500
a. What is Parrott Company's breakeven point in units and $ ?
b. What was Parrott Company's margin of safety for last year in percentage, units, and dollars?
c. If Parrott increased quality by using materials that would raise its variable expense per unit by $0.70, complete a new income statement for Parrott if they sold 10% more units this year.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started