In: Accounting
Break-Even Sales and Cost-Volume-Profit Chart
For the coming year, Sorkin Company anticipates a unit selling price of $110, a unit variable cost of $55, and fixed costs of $275,000.
Required:
1. Compute the anticipated break-even sales in
units.
units
2. Compute the sales (units) required to
realize income from operations of $104,500.
units
3. Construct a cost-volume-profit chart, assuming maximum sales of 10,000 units within the relevant range. From your chart, indicate whether each of the following sales levels would produce a profit, a loss, or break-even.
$770,000 | |
$693,000 | |
$550,000 | |
$418,000 | |
$330,000 |
4. Determine the probable income (loss) from
operations if sales total 8,000 units. If required, use the minus
sign to indicate a loss.
$