Alley Company makes student book bags that sell for $60 each. For the coming year, management expects fixed costs to be $225,000. Variable costs are $15 per unit. Instructions: a. Compute break-even sales in dollars using the mathematical equation. b. Compute break-even sales using the contribution margin. c. Compute margin of safety assuming actual sales are $980,000. d. Compute the sales if the target income of $100,000.
Alley Company makes student book bags that sell for $60 each. For the coming year, management expects fixed costs to be $225,000. Variable costs are $15 per unit. Instructions: a. Compute break-even sales in dollars using the mathematical equation. b. Compute break-even sales using the contribution margin. c. Compute margin of safety assuming actual sales are $980,000. d. Compute the sales if the target income of $100,000.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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