Reference no: EM132504281

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%?