XYZ Corp. prepared the following income statement for 2016: XYZ Corporation Inco
ID: 2601399 • Letter: X
Question
XYZ Corp. prepared the following income statement for 2016:
XYZ Corporation
Income Statement
For the Year Ended Dec. 31, 2016
Sales (20,000 units)--------------------------600,000
Variable expenses----------------------------360,000
Contribution margine-------------------------240,000
Fixed expenses--------------------------------180,000
Net income--------------------------------------60,000
a) What is the crporation'sbreak-even point in units?
b) How many more units would the corporation have had to sell to earn net income of 90,000?
Explanation / Answer
Dear Student Thank you for using Chegg Please find below the answer and please give thumbs up Statementshowing Computations Paticulars Amount Sales 600,000.00 Less Variable Expenses (360,000.00) Contribution Margin 240,000.00 Fixed cost (180,000.00) Net operating income 60,000.00 Contribution margin per unit = 240,000/20,000 12.00 a) Break even point in units = 180,000/12 15,000.00 b) Fixed Expenses 180,000.00 Net Income desired 90,000.00 Contribution desired 270,000.00 No of units to be sold = 270,000/12 22,500.00 More units = 22500 - 20000 2,500.00
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