what will be the company's break-even point in units?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Operating Income
Variable Costs
Sales
Fixed Costs per Unit
Selling Price per Unit
Variable Cost per Unit
Contribution Margin
Fixed Costs
Operating Loss
ments
as
. If Flanders purchases the new machinery. what will be the company's break-even point in units?
Use commas as needed (i.e. 1,234).
. If Flanders purchases the new machinery, what will be the company's break-even point in dollars?
Rounded to whole dollars and shown with "S and commas as needed (i.e. $12,345).
· Assuming Flanders purchases the new machinery, construct a contribution margin income statement for sale of 216,000 units, Rounded to whole dollars and shown with "$" and commas as needed (i.e. $12,345).
dent
Flanders Manufacturing
Contribution Margin Income Statement
unciation
ch)
For the Month
um Cafe
vices
tudiante
ons
we
. Complete the following contribution margin income statement to properly reflect the break-even information given in the problem. Rounded to whole dollars and shown with "S" and commas as needed (i.e. $12.34
ders Manufacturing
Contribution Margin Income Statement
For the Month

Transcribed Image Text:Flanders Manufacturing is considering purchasing a new machine that will reduce variable costs per part produced by
$0.15. The machine will increase fixed costs by $18,250 per year. The information they will use to consider these
changes is shown here.
Current
Units sold
Sales price per unit
Variable cost per unit
Contribution margin per unit
Fixed costs
Break-even (in units)
Break-even (in dollars)
216,000
2.15
%$4
1.75
2$
0.40
$ 56,000
140,000
$301,000
Sales
Variable costS
Contribution margin
Fixed costs
Net income (loss)
$464,400
$378,000
$ 86,400
$ 56,000
$ 30,400
NOTE: You may want to use one of the EXCEL spreadsheets I provided in the module - Chapter03 CM Income
Statement.xlsx or Chapter03 CM Income Statement BE.xlsx - to help complete this problem.
The following names are to be considered when completing this problem:
Operating Income
Variable Costs
Sales
Fixed Costs per Unit
Selling Price per Unit
Variable Cost per Unit
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