Reference no: EM132949359

Problem 1: Calculate the breakeven point in Units. Round any partial units up.

Problem 2: Calculate the sales dollars rounded to the nearest dollar needed to increase operating income by $100,000. Ignore minor rounding difference in your answer. - i.e. increase operating income by $99,950 to $100,050.

Problem 3: To the nearest dollar what would sales revenue need to be to earn net income of $175,000. Ignore minor rounding differences - i.e. net income can range from $149,900 to $150,100

Problem 1: Assuming there will be no interest expense, determine the necessary units to be produced and sold to earn net income of $150,000. Ignore minor rounding differences - i.e. round up the units to be within the range from $149,900 to $150,100.

Data Set

CVP Limited Income Statement for the Year Ended December 31, 2020

Units produced and sold 10,000

Sales $1,000,000

Direct Material 120,000

Direct Labour 30,000

Variable Manufacturing Overhead 25,000

Fixed Manufacturing Overhead 550,015

Gross Margin 274,985

Fixed Selling General and Administrative Expense 140,000

Variable Selling General and Administrative Expense 40,000

Operating Income 94,985

Interest Expense 66,500

Net Income before Taxes 28,485

Income Tax Expense at 30% Rounded 8,500

Net Income $19,985