Reference no: EM132609430

Question 1. West Island distributes a single product. The company's sales and expenses for the month of June are shown. Using the information presented, answer these questions:

a. What is the break-even point in units sold and dollar sales?

b. What is the total contribution margin at the break-even point?

c. If West Island wants to earn a profit of $21,000, how many units would they have to sell?

d. Prepare a contribution margin income statement that reflects sales necessary to achieve the target profit.

Question 2. 5. Wellington, Inc., reports the following contribution margin income statement for the month of May. The company has the opportunity to purchase new machinery that will reduce its variable cost per unit by $10 but will increase fixed costs by 20%. Prepare a projected contribution margin income statement for Wellington, Inc., assuming it purchases the new equipment. Assume sales level remains unchanged.