Break-Even Point in Units Chillmax Company plans to sell 3,500 pairs of shoes at 560 each in the coming year. Unit variable cost is $21 (includes direct materials, direct labor, variable factory overhead, and variable selling expense). Total fixed cost equals $78,000 (includes fixed factory overhead and fixed selling and administrative expense). Required: Question Content Area 1. Calculate the break-even pairs of shoes Feedback Area Feedback At the break-even point, operating income equals 50. The break-even point tells managers how many units must be sold to cover all costs. Once more than the break-even units are sold, the company begins to earn a profit. So to get the break-even units using the operating income statement, we set operating income to zero, and then solve for the number of units Break-Even Units = Total Fixed Cost (Price - Variable cost per unit) Review the "How to Calculate the Break-Even Point in Units example in your text. Question Content Area 2 Check your answer by preparing a contribution margin income statement based on the break-even units. Enter all amounts as a positive number. blank Total blank blank Sfill in the blank 28df3df7602bfe9_1 blank blank fill in the blank 28df3df7602bfe9_2 blank blank Shill in the blank 28df3df7602bfe9_3 blank blank fill in the blank 28df3df7602bfe9_4 Still in the blank 28df3df7602bfe9_5 blank blank Sales Total variable cost Total contribution margin Total fixed cost Operating income
Break-Even Point in Units Chillmax Company plans to sell 3,500 pairs of shoes at 560 each in the coming year. Unit variable cost is $21 (includes direct materials, direct labor, variable factory overhead, and variable selling expense). Total fixed cost equals $78,000 (includes fixed factory overhead and fixed selling and administrative expense). Required: Question Content Area 1. Calculate the break-even pairs of shoes Feedback Area Feedback At the break-even point, operating income equals 50. The break-even point tells managers how many units must be sold to cover all costs. Once more than the break-even units are sold, the company begins to earn a profit. So to get the break-even units using the operating income statement, we set operating income to zero, and then solve for the number of units Break-Even Units = Total Fixed Cost (Price - Variable cost per unit) Review the "How to Calculate the Break-Even Point in Units example in your text. Question Content Area 2 Check your answer by preparing a contribution margin income statement based on the break-even units. Enter all amounts as a positive number. blank Total blank blank Sfill in the blank 28df3df7602bfe9_1 blank blank fill in the blank 28df3df7602bfe9_2 blank blank Shill in the blank 28df3df7602bfe9_3 blank blank fill in the blank 28df3df7602bfe9_4 Still in the blank 28df3df7602bfe9_5 blank blank Sales Total variable cost Total contribution margin Total fixed cost Operating income
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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answer in text form please (without image)
Transcribed Image Text:Break-Even Point in Units
Chillmax Company plans to sell 3,500 pairs of shoes at $60 each in the coming year. Unit variable cost is $21 (includes direct materials, direct labor, variable factory overhead, and variable selling expense). Total fixed cost equals $78,000 (includes fixed factory overhead and fixed selling and administrative
expense).
Required:
Question Content Area
1. Calculate the break-even pairs of shoes.
Feedback Area
Feedback
At the break-even point, operating income equals So. The break-even point tells managers how many units must be sold to cover all costs. Once more than the break-even units are sold, the company begins to earn a profit. So to get the break-even units using the operating income statement, we set
operating income to zero, and then solve for the number of units.
= Total Fixed Cost
Break-Even Units
(Price - Variable cost per unit)
Review the "How to Calculate the Break-Even Point in Units" example in your text.
Question Content Area
2. Check your answer by preparing a contribution margin income statement based on the break-even units. Enter all amounts as a positive number.
blank
Total
blank blank
Sales
Total variable cost
Total contribution margin
Total fixed cost
Operating income
Sfill in the blank 28df3df7602bfe9_1 blank blank
fill in the blank 28df3df7602bfe9_2 blank blank
Sfill in the blank 28df3df7602bfe9_3 blank blank
fill in the blank 28df3df7602bfe9_4
Sfill in the blank 28df3df7602bfe9_5 blank blank
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