J.T. Brooks and Company, a manufacturer of qual- ity handmade walnut bowls, has had a steady growth in sales for the past 5 years. However, increased competition has led Mr. Brooks, the president, to believe that an aggressive marketing campaign will be necessary next year to maintain the company's present growth. To prepare for next year's marketing cam- paign, the company's controller has prepared and presented Mr. Brooks with the following data for the current year, 2017: Variable cost (per bowl) Direct materials $ 3.00 Direct manufacturing labor Variable overhead (manufacturing, marketing, distribution, and customer service) 8.00 7.50 $ 18.50 Total variable cost per bowl Fixed costs $ 20,000 Manufacturing Marketing, distribution, and customer service Total fixed costs 194,500 $214,500 $ 35.00 $770,000 Selling price Expected sales, 22,000 units Income tax rate 40%

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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What is the breakeven point in units for 2017?

J.T. Brooks and Company, a manufacturer of qual-
ity handmade walnut bowls, has had a steady growth in sales for the past 5 years. However, increased
competition has led Mr. Brooks, the president, to believe that an aggressive marketing campaign will be
necessary next year to maintain the company's present growth. To prepare for next year's marketing cam-
paign, the company's controller has prepared and presented Mr. Brooks with the following data for the
current year, 2017:
Variable cost (per bowl)
Direct materials
$ 3.00
Direct manufacturing labor
Variable overhead (manufacturing, marketing,
distribution, and customer service)
8.00
7.50
$ 18.50
Total variable cost per bowl
Fixed costs
$ 20,000
Manufacturing
Marketing, distribution, and customer service
Total fixed costs
194,500
$214,500
$ 35.00
$770,000
Selling price
Expected sales, 22,000 units
Income tax rate
40%
Transcribed Image Text:J.T. Brooks and Company, a manufacturer of qual- ity handmade walnut bowls, has had a steady growth in sales for the past 5 years. However, increased competition has led Mr. Brooks, the president, to believe that an aggressive marketing campaign will be necessary next year to maintain the company's present growth. To prepare for next year's marketing cam- paign, the company's controller has prepared and presented Mr. Brooks with the following data for the current year, 2017: Variable cost (per bowl) Direct materials $ 3.00 Direct manufacturing labor Variable overhead (manufacturing, marketing, distribution, and customer service) 8.00 7.50 $ 18.50 Total variable cost per bowl Fixed costs $ 20,000 Manufacturing Marketing, distribution, and customer service Total fixed costs 194,500 $214,500 $ 35.00 $770,000 Selling price Expected sales, 22,000 units Income tax rate 40%
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