Red Duv Aviation has provided the following information for the month of July:

• Sales $360,000
• Fixed Manufacturing costs 35,000
• Fixed marketing and administrative costs 25,000
• Total fixed costs 60,000
• Total variable costs 240,000
• Unit price 90
• Unit variable manufacturing costs 55
• Unit variable marketing costs 5

Compute the following:

a. Monthly operating profit when sales total $360,000

b. Break-even number in units

c. Number of units sold that would produce an operating profit of $120,000

d. Sales dollars required to earn an operating profit of $20,000

e. Number of units sold in July

Quick Check

1. If Red Duv Aviation increases its sales price per unit for Produt A, the new breakeven point will
   1. increase
   2. decrease
   3. remain the same
   4. More information is needed

2. If Red Duv Aviation increased its fixed costs for Product B, then the contribution margin per unit will
   1. increase
   2. decrease
   3. remain the same
   4. More information needed.

3. If Red Duv Aviation's fixed costs total $90,000 per month, the variable cost per unit produced in the small engine parts department is $45, and the parts sell for $75, what is the breakeven point in units?
   1. 1,200 parts
   2. 2,000 parts
   3. 225,000 parts
   4. 3,000 parts

4. If Red Duv Aviation's fixed costs total $90,000 per month, the variable cost per unit produced in the small engine parts department is $45, and the parts sell for $75, how much revenue must Red Duv Aviation generate to earn $120,000 in operating income per month?

1. $350,000
2. $210,000
3. $7,000
4. $525,000