Question
Whittier Company plans to sell 1,000 mowers at $400 each in the coming year. Product costs include: Direct materials per mower ..................................... $ 180 Direct
Whittier Company plans to sell 1,000 mowers at $400 each in the coming year. Product costs include: Direct materials per mower ..................................... $ 180 Direct labour per mower .......................................... $ 100 Variable factory overhead per mower ..................... $ 25 Total fixed factory overhead .................................... $ 15,000 Variable selling and administrative per mower ....... $ 20 Fixed selling and administrative expense................. $ 30,000 (The relevant range of production is 500 units to 1,500 units.) Requirements: 5. Calculate the sales revenue dollars that Whittier Company must make to break even. 6. Check your answer to Req 4 and Req 5 by preparing a contribution margin income statement based at the break-even point.
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