Answer to Question #90962 in Other for vivian

Question

sales(29,000 units) shs 1,218,000
less variable cost 812,000
contribution margin 406,000
less fixed expenses 300,000
net income 106,000
1.compute the break even point in units and sales
2.the margin of safety.
3.suppose it increases fixed cost by 250,000 per year but lower variable cost to 45% of sales, units sold will remain unchanged. prepare a budget income statement assuming this investment is made.
what is the new break even point in units and sales, if the investment is made?

Answer 1

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