ABC Company projected the following operating income for the coming year: Units sold Sales revenue Variable expenses 385,000 $9,240,000 7,392,000 Contribution margin 1,848,000 Fixed expenses Operating income 1,663,200 $184,800 a. Compute break-even points in sales dollars. b. Compute the number of units to be sold to earn an operating income of $330,000. c. Compute the additional income the company would earn if sales were to increase by $55,000 more than expected.

ABC Company projected the following operating income for the coming year: Units sold Sales revenue Variable expenses 385,000 $9,240,000 7,392,000 Contribution margin 1,848,000 Fixed expenses Operating income 1,663,200 $184,800 a. Compute break-even points in sales dollars. b. Compute the number of units to be sold to earn an operating income of $330,000. c. Compute the additional income the company would earn if sales were to increase by $55,000 more than expected.

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter7: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 47E: Klamath Company produces a single product. The projected income statement for the coming year is as...

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Please need answer this general accounting question
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Accounting Gosnell Company produces two products: squares and circles. The projected income for thecoming year, segmented by product line, follows:Squares Circles TotalSales P300,000 P2,500,000 P2,800,000Less: Variable expenses 100,000 500,000 600,000Contribution margin P200,000 P2,000,000 P2,200,000Less: Direct fixed expenses 28,000 1,500,000 1,528,000Product margin P172,000 P 500,000 P 672,000Less: Common fixedexpenses100,000Operating expenses P 572,000The selling prices are P30 for squares and P50 for circles.1. Compute the number of units of each product that must be sold for Gosnell Companyto break even.2. Assume that the marketing manager changes the sales mix of the two products sothat the ratio is three squares to five circles. Repeat Requirement 13. Refer to the original data. Suppose that Gosnell can increase the sales of squares withincreased advertising. The extra advertising would cost an additional P45,000, andsome of the potential purchasers of circles would switch to…