Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

XYZ had sales of $10,000 (100 units at $100 per). Manufacturing costs consisted of direct labor $1,500, direct materials $1,400, variable factory overhead $1,000, and

XYZ had sales of $10,000 (100 units at $100 per). Manufacturing costs consisted of direct labor $1,500, direct materials $1,400, variable factory overhead $1,000, and fixed factory overhead $500. The company did not maintain any inventories, so total cost of goods sold was $4,400. Selling expenses totaled $1,600 ($600 variable and $1,000 fixed), and administrative expenses totaled $1,500 ($500 variable and $1,000 fixed). Operating income was $2,500. Round all final answers to nearest dollar or whole number.

Requirements:

  1. What is the break-even point in sales dollars and in units if the fixed factory overhead increased by $1,700?
  2. What is the break-even point in sales dollars and in units if costs remain as originally projected?
  3. Whatwouldbetheoperatingincomeifsalesunitsincreasedby25%?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Accounting Information for Decisions

Authors: John J. Wild

9th edition

1259917045, 978-1259917042

More Books

Students also viewed these Accounting questions