Haas Company manufactures and sells one product. The following information perta

Question

Haas Company manufactures and sells one product. The following information pertains to each of the company's first three years of operations: Variable costs per unit: Manufacturing: $23 $15 Direct materials Direct labor Variable manufacturing overhead $1 Variable selling and administrative Fixed manufacturing overhead Fixed selling and administrative expenses $ Fixed costs per year: 240,000 180,000 During its first year of operations, Haas produced 60,000 units and sold 60,000 units During its second year of operations, it produced 75,000 units and sold 50,000 units. In its third year, Haas produced 40,000 units and sold 65,000 units. The selling price of the company's product is $52 per unit. Required: 1. Compute the company's break-even point in units sold. Answer is complete and correct. Break-even unit sales 60,000 units

Explanation / Answer

Absorption costing income statement Sales 3120000 2600000 3380000 Cost of goods sold 2880000 2360000 3250000 Gross margin 240000 240000 130000 Selling and administrative expenses 240000 230000 245000 Net operating income(loss) 0 10000 -115000

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