Break-Even Sales and Cost-Volume-Profit Graph Last year, Ridgecrest Inc. had sales of $3,221,680, based on a unit selling price of $440. The variable cost per unit was $280, and fixed costs were $836,800. The maximum sales within Ridgecrest Inc.'s relevant range are 13,000 units. Ridgecrest Inc. is considering a proposal to spend an additional $168,000 on billboard advertising during the current year in an attempt to increase sales and utilize unused capacity. Using the cost-volume-profit graph prepared in part (1), determine (a) the operating income for last year and (b) the maximum operating income that could have been realized during the year. Operating income $ Maximum operating income $
Break-Even Sales and Cost-Volume-Profit Graph Last year, Ridgecrest Inc. had sales of $3,221,680, based on a unit selling price of $440. The variable cost per unit was $280, and fixed costs were $836,800. The maximum sales within Ridgecrest Inc.'s relevant range are 13,000 units. Ridgecrest Inc. is considering a proposal to spend an additional $168,000 on billboard advertising during the current year in an attempt to increase sales and utilize unused capacity. Using the cost-volume-profit graph prepared in part (1), determine (a) the operating income for last year and (b) the maximum operating income that could have been realized during the year. Operating income $ Maximum operating income $
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Break-Even Sales and Cost-Volume-Profit Graph
Last year, Ridgecrest Inc. had sales of $3,221,680, based on a unit selling price of $440. The variable cost per unit was $280, and fixed costs were $836,800. The maximum sales within Ridgecrest Inc.'s relevant range are 13,000 units. Ridgecrest Inc. is considering a proposal to spend an additional $168,000 on billboard advertising during the current year in an attempt to increase sales and utilize unused capacity.
Using the cost-volume-profit graph prepared in part (1), determine (a) the operating income for last year and (b) the maximum operating income that could have been realized during the year.
| Operating income | $ |
| Maximum operating income | $ |
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