Question 2]

Whittier Company plans to sell 1,000 mowers at $400 each in the coming year.

Total variable expense per unit is $325. Total fixed expense is $45,000.

Required:

1. Calculate the sales revenue and units that Whittier Company must make to break

even. ( 4 marks)

2. Check your answer by preparing a contribution margin income statement

based on the break-even point calculated.(5 marks)

3. Find the new break units and sales even under the following conditions

i. sales price increase by 25 %

ii. variable expenses reduced by $25

iii. Fixed cost has increased by 20 %