Nutri-Tress Company produces combination shampoos and conditioners in individual use bottles for hotels. Each bottle sells for
Question:
Nutri-Tress Company produces combination shampoos and conditioners in individual use bottles for hotels. Each bottle sells for $0.36. The variable costs for each bottle (materials, labor, and overhead) total $0.27. The total fixed costs are $58,500. During the most recent year, 830,000 bottles were sold.
Required:
1. What is the break-even point in units for Nutri-Tress? What is the margin of safety in units for the most recent year?
2. Prepare an income statement for Nutri-Tress’s most recent year.
3. How many units must be sold for Nutri-Tress to earn a profit of $36,000?
4. What is the level of sales dollars needed for Nutri-Tress to earn operating income of 20 percent of sales?
Step by Step Answer:
Cornerstones of Managerial Accounting
ISBN: 978-0324660135
3rd Edition
Authors: Mowen, Hansen, Heitger