Question

Mathias Corporation manufactures and sells wire rakes. The rakes sell for $16 each. Information about the company’s costs is as follows:
Variable manufacturing cost per unit . . . . . . . . . . . . . . . . . $ 8
Variable selling and administrative cost per unit . . . . . . . . 4
Fixed manufacturing overhead per month . . . . . . . . . . $150,000
Fixed selling and administrative cost per month . . . . . ... 350,000

a. Determine the company’s monthly break-even point in units.
b. Determine the sales volume (in dollars) required for a monthly operating income of $100,000.
c. Compute the company’s margin of safety if its current monthly sales level is $3,800,000.
d. Estimate the amount by which monthly operating income will increase if the company anticipates a $200,000 increase in monthly sales volume.



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  • CreatedApril 17, 2014
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