Question 4 12 Marks

Slice-A-Matic Ltd. manufactures hand-held fans. This past year, because of El Nino, the summer was not hot and the company had a very disappointing season. With a factory capacity of 150,000 units, only 90,000 were sold, as indicated by the following statement:

Question 4 - 12 Marks Slice-A-Matic Ltd. manufactures hand-held fans. This past year, because of El Nino, the summer was not hot and the company had a very disappointing season. With a factory capacity of 150,000 units, only 90,000 were sold, as indicated by the following statement: Slice-A-Matic Ltd. Income Statement For the Year Ended December 31, XXXX 360,000 90,000 72,000 18,000 80,000 98,000 260,000 100,000 Sales (90,000 units) Cost of good sold: Direct materials Direct labour Factory Overhead Variable Fixed Gross Profit Operating expenses: Selling Expenses: Variable: Sales commissions (% of sales) Shipping Fixed: Advertising Administrative expenses: Variable (based on sales) Fixed Operating loss 22,500 3,600 26,100 40,000 66,100 4,500 33,900 38,400 104,500 -4,500 Required: (Round to 2 decimal places) 1. What is the breakeven point for the income statement above? 2. If Slice-A-Matic Ltd. desired an operating income of $15,000, what would the total sales dollars have to be? 3. How many units must be sold to yield an operating income of 12% of sales