Question 1
The XYZ Corporation sells only one product. The following is budgeted information for the product:
Annual Production and Sales Capacity (Units)	50,000
Budgeted Selling Price	$200	Per Unit
Variable Cost of Goods Sold	$75	Per Unit
Fixed Manufacturing Cost	$600,000
Variable Selling and Administrative Costs	$30	Per Unit
Fixed Selling and Administrative Costs	$500,000
The company's Corporate Tax Rate is	40%
1. How many units does the company need to sell to breakeven?
2. How much revenue does the company need to generate to breakeven?
3. How many units does the company need to sell to earn an operating profit (before taxes) of	$500,000	?
4. How much revenue does the company need to generate to earn net income (after taxes) of	$750,000	?
5. Assume the company is currently producing and selling	50,000	units
By what percentage will operating income change if sales increase by	5%	from the	50,000	units
Be sure to provide figures to justify your answer
6. Assume the company is currently producing and selling	50,000	units
By what percentage will operating income change if sales decrease by	3%	from the	50,000	units
Be sure to provide figures to justify your answer