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Question - Mathers Company had sales of $20,000 (200 units at $100 per). Manufacturing costs consisted of direct labor $1,600, direct materials $1,200, variable factory overhead $1,000, and fixed factory overhead $500. Selling expenses totaled $1,250 ($250 variable and $1,000 fixed), and administrative expenses totaled $1,600 ($410 variable and $1,190 fixed). Operating income was $12,850. Round all final answers to nearest dollar or whole number.
Requirements -
1. What is the break-even point in sales dollars and in units if the fixed factory overhead increased by $1,000?
2. What is the break-even point in sales dollars and in units if costs remain as originally projected?
3. What would be the operating income if sales units increased by 10%?
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