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The following information applies to questions 4 and 5. The Carbon Ink Company's profit statement for the preceding year is presented below. Except as noted,
The following information applies to questions 4 and 5. The Carbon Ink Company's profit statement for the preceding year is presented below. Except as noted, the cost and sales relationship for the coming year is expected to follow the same pattern as in the preceding year. Sales and production are always equal. Sales (2,000,000 bottles at $0.25) 500,000 Variable costs 300,000 200,000 100,000 100,000 Fixed costs Profit 4. What is the break-even point in units? (a) 250,000 units (b) 500,000 units (C) 750,000 units (d) 1,000,000 units 5. An extension to the factory will add $50,000 to the fixed costs. How many bottles would have to be sold after the extension to break even? (a) 1,000,000 units (b) 1,250,000 units (C) 1,500,000 units (d) 1,750,000 units
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