Guthrie Industries manufactures and sells dog collars. The collars sell for $12 each. Information about the company’s costs is as follows. Variable manufacturing cost per unit $ 2 Variable selling and administrative cost per unit 1 Fixed manufacturing overhead per month $ 250,000 Fixed selling and administrative cost per month 200,000 a. Determine the company's monthly break-even point in units. b. Determine the sales volume (in dollars) required for a monthly operating income of $900,000. c. Compute the company’s margin of safety if its current monthly sales level is $1,400,000. d. Estimate the amount by which monthly operating income will increase if Guthrie anticipates a $60,000 increase in monthly sales volume.
Guthrie Industries manufactures and sells dog collars. The collars sell for $12 each. Information about the company’s costs is as follows.
Variable
Variable selling and administrative cost per unit 1
Fixed manufacturing overhead per month $ 250,000
Fixed selling and administrative cost per month 200,000
a. Determine the company's monthly break-even point in units.
b. Determine the sales volume (in dollars) required for a monthly operating income of $900,000.
c. Compute the company’s margin of safety if its current monthly sales level is $1,400,000.
d. Estimate the amount by which monthly operating income will increase if Guthrie anticipates a $60,000 increase in monthly sales volume.
![](/static/compass_v2/shared-icons/check-mark.png)
Trending now
This is a popular solution!
Step by step
Solved in 5 steps
![Blurred answer](/static/compass_v2/solution-images/blurred-answer.jpg)
![Cornerstones of Cost Management (Cornerstones Ser…](https://www.bartleby.com/isbn_cover_images/9781305970663/9781305970663_smallCoverImage.gif)
![Managerial Accounting: The Cornerstone of Busines…](https://www.bartleby.com/isbn_cover_images/9781337115773/9781337115773_smallCoverImage.gif)
![Cornerstones of Cost Management (Cornerstones Ser…](https://www.bartleby.com/isbn_cover_images/9781305970663/9781305970663_smallCoverImage.gif)
![Managerial Accounting: The Cornerstone of Busines…](https://www.bartleby.com/isbn_cover_images/9781337115773/9781337115773_smallCoverImage.gif)
![Managerial Accounting](https://www.bartleby.com/isbn_cover_images/9781337912020/9781337912020_smallCoverImage.jpg)
![Financial And Managerial Accounting](https://www.bartleby.com/isbn_cover_images/9781337902663/9781337902663_smallCoverImage.jpg)