+1-316-444-1378

Break-Even Sales Under Present and Proposed ConditionsBoleyn Company operating at full capacity sold 120000 units at a price of $140 per unit during 2014. Its income statement for 2014 is as follows:The division of costs between variable and fixed is as follows:Management is considering a plant expansion program that will permit an increase of $2800000 in yearly sales. The expansion will increase fixed costs by $1250000 but will not affect the relationship between sales and variable costs.Required:1. Determine the total fixed costs and the total variable costs for 2014.2. Determine for 2014 (a) the unit variable cost and (b) the unit contribution margin.3. Compute the break-even sales (units) for 2014. units4. Compute the break-even sales (units) under the proposed program. units5. Determine the amount of sales (units) that would be necessary under the proposed program to realize the $5650000 of income from operations that was earned in 2014. units6. Determine the maximum income from operations possible with the expanded plant.$7. If the proposal is accepted and sales remain at the 2014 level what will the income or loss from operations be for 2015? $ 8. Based on the data given would you recommend accepting the proposal?
Attachments:

Categories: Uncategorized

0 Comments

Leave a Reply

Your email address will not be published. Required fields are marked *