9/ The budgeted income statement presented below is for Burkett Corporation for

Question

9/ The budgeted income statement presented below is for Burkett Corporation for the coming fiscal year. Compute the number of units that must be sold in order to achieve a target pretax income of $123,000.

Multiple Choice

30,000.

46,849.

56,151.

75,740.

51,500.

10/ A company has fixed costs of $82,000. Its contribution margin ratio is 41% and the product sells for $77 per unit. What is the company's break-even point in dollar sales?

Multiple Choice

$18,000.

$146,000.

$200,000.

$164,000.

$118,000.

Sales (40,000 units) $ 1,000,000 Costs: Direct materials $ 263,500 Direct labor 241,500 Fixed factory overhead 107,500 Variable factory overhead 151,500 Fixed marketing costs 111,500 Variable marketing costs 51,500 927,000 Pretax income $ 73,000

Explanation / Answer

1 Unit selling price=1000000/40000= $25 Unit variable cost=(263500+241500+151500+51500)/40000= $17.7 Units to be sold=(107500+111500+123000)/(25-17.7)= 46849 2 Break-even point in dollar sales=82000/41%= $200000

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