Reavis Company prepared the following income statement for 2012: REAVIS COMPANY Income Statement For the Year Ended

Question:

Reavis Company prepared the following income statement for 2012:
REAVIS COMPANY
Income Statement
For the Year Ended December 31, 2012
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Sales (20,000 units) ............................................................................................. $600,000
Variable expenses ............................................................................................... 360,000
............................................................................................ 240,000
Fixed expenses .................................................................................................... 180,000
Net income .......................................................................................................... $ 60,000
Instructions
What is the company's break-even point in units?
How many more units would the company have had to sell to earn net income of $90,000 in 2012?
If the company expects a 25% increase in sales volume in 2013, what would be the expected net income in 2013?
Contribution Margin
Contribution margin is an important element of cost volume profit analysis that managers carry out to assess the maximum number of units that are required to be at the breakeven point. Contribution margin is the profit before fixed cost and taxes...