Calculate the break-even point in units and sales dollars

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Question - Brown Company makes printers that sell for $400 each. For the coming year, management expects fixed costs to total $4,200,000 and variable costs to be $160 per unit. Sales for the coming year are expected to be 18,000 units.

Required -

1. Calculate the break-even point in units and sales dollars.

2. Calculate the expected margin of safety in dollars and units.

3. What is the expected net income? (Use the incremental approach).

4. How many units must be sold to earn an operating income of $1,200,000.

5. Refer to the original information above. Calculate the expected degree of operating leverage.

Reference no: EM133005195

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