Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Your assistance will be highly appreciated. Foreman Fork, Inc.'s income statement for 2005 on production and sales of 200 000 units is as follows: Revenues
Your assistance will be highly appreciated.
Foreman Fork, Inc.'s income statement for 2005 on production and sales of 200 000 units is as follows: Revenues R2 600 000 Cost of goods sold 1 600 000 Gross rnargin 1 000 000 Marketing & Distribution costs (1 150 000) Operating income (loss) R (150 000) Foreman's fixed manufacturing costs are R500 000 and variable marketing and distribution costs are R4 per unit. Foreman's gross margin per unit is R5. Sam Hogan, Foreman's president believes that if production and sales had been 230 000 units, the company would have covered the R1 150 000 of marketing and distribution costs and enabled Foreman to breakeven for the year. Required: 2.1 Calculate Foreman's operating income if production and sales equal 230 000 units. 2.2 Was Sam Hogan was right or wrong? Briefly explain. 3. Calculate the breakeven point for 2005 in units and in evenuesStep by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started