Solution-What would the company monthly net operating

What would the company monthly net operating income be

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Reference no: EM132614647

Switch Company produces and sells a single product. The company's income statement for the most recent month is given below:

Sales (6,000 units at $40 per unit) Less manufacturing costs:		$240,000
Direct materials	$48,000
Direct labor (variable)	$60,000
Variable factory overhead	$12,000
Fixed factory overhead	$30,000	$150,000
Gross margin		$90,000
Less selling and other expenses:
Variable selling and other expenses	$24,000
Fixed selling and other expenses	$42,000	$66,(X)0
Net operating income		574.000
.

Note:

There are no beginning or ending inventories.

Required:

Question a. Can you please show a contribution format income statement.

Question b. Can you please show the company's monthly break-even point both in units and dollars.

Question c. Can you please show what would the company's monthly net operating income be if sales increased by 25% and there is no change in total fixed expenses?

Question d. Can you please show what dollar sales must the company achieve in order to earn a net operating income of $50,000 per month?

Question e. The company has decided to automate a portion of its operations. The change will reduce direct labor costs per unit by 40 percent, but it will double the costs for fixed factory overhead. Can you please show the new breakeven point in units.

Reference no: EM132614647

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What would the company monthly net operating income be

Reference no: EM132614647

Reference no: EM132614647

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