Your Company Income Statement For the month ended January 31 Net Sales (6,000 un
ID: 2484543 • Letter: Y
Question
Your Company
Income Statement
For the month ended January 31
Net Sales (6,000 units @ $130/unit)
$ 780,000
Cost of Goods Sold
Materials
$ 528,000
Labor
22,500
Factory Overhead
36,600
587,100
Gross Margin on Sales
$ 192,900
Operating Expenses
71,000
Net Income
$ 121,900
Costs and Expenses
January
Variable
Fixed
Direct materials
528,000
528,000
-
Direct labor
22,500
22,500
-
Manufacturing overhead:
Variable
27,000
27,000
-
Fixed
9,600
-
9,600
Operating Expenses
71,000
40,000
31,000
Total
658,100
617,500
40,600
Based on the information provided above, complete the following as part of your company’s cost-volume-profit analysis:
Determine the breakeven sales volume in dollars and units. Units should be rounded up to the nearest whole value (no decimals) since partial units cannot be produced
If your company wishes to earn a net income of $200,000, what amount of sales (dollars) does your company need to achieve?
Your Company
Income Statement
For the month ended January 31
Net Sales (6,000 units @ $130/unit)
$ 780,000
Cost of Goods Sold
Materials
$ 528,000
Labor
22,500
Factory Overhead
36,600
587,100
Gross Margin on Sales
$ 192,900
Operating Expenses
71,000
Net Income
$ 121,900
Explanation / Answer
Answer: BEP (in units)=Fixed expense/Contribution margin per unit
=$40600/($130-$96.25)
=$40600/$33.75
=1203 units
BEP ($)=1203*$130=$156390
Answer:
=($40600+$200000)/$33.75
=7129 units
=7129*130=$926770
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