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Vast Spirit Calendars imprints calendars with college names. The company has fixed expenses of $1,065,000 each month plus variable expenses of $3.50 per carton of
Vast Spirit Calendars imprints calendars with college names. The company has fixed expenses of $1,065,000 each month plus variable expenses of $3.50 per carton of calendars. Of the variable expense, 69% is cost of goods sold, while the remaining 31% relates to variable operating expenses. The company sells each carton of calendars for $13.50. Read the requirements. Requirement 1. Compute the number of cartons of calendars that Vast Spirit Calendars must sell each month to breakeven. Begin by determining the basic income statement equation. Sales revenue Fixed expenses Variable expenses Operating income Using the basic income statement equation you determined above solve for the number of cartons to break even. The breakeven sales is 106,500 cartons. Requirement 2. Compute the dollar amount of monthly sales Vast Spirit Calendars needs in order to earn $304,000 in operating income. Begin by determining the formula. + = Target sales in dollars
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