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Question - Assume that the number of units that Sutcliffe sold exceeded the break-even point by one (1). How much would operating income be?
The units sold at break even point was 500. Here is the problem: Further analysis of Sutcliffe Industries's fixed costs revealed that the company actually faces annual fixed overhead costs of $9,800 and annual fixed selling and administrative costs of $4,200. Variable cost estimates are correct: direct materials cost, $4.80 per unit; direct labor costs, $6.00 per unit; and variable overhead costs, $1.20 per unit. At this time, the selling price of $40 will not change. Complete the following formulas for the revised fixed costs. Enter the ratio as a percentage.
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