YUX Corporation sells a single product for $50. Its management estimates the following revenues and costs for the year 2022:

Instructions 

a. Assuming fixed costs and net sales are spread evenly throughout the year, determine YUX’s monthly break-even point in (1) units and (2) dollars. 

b. Calculate the contribution margin ratio, the annual margin of safety ratio, and the annual operating income. 

c. Determine the percentage increase in annual operating income if YUX Corporation increases its selling price by 20% and all other factors (including demand) remain constant. 

d. Assume the price remains at $50 per unit and variable costs remain the same per unit, but fixed costs increase by 20% annually. Calculate the percentage increase in unit sales required to achieve the same level of annual operating income calculated in part (b). 

e. Determine the sales required to earn an operating income of $360,000 after tax. YUX Corporation’s income tax rate is 40%.

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Net sales Direct materials Direct labour Manufacturing overhead-variable Manufacturing overhead-fixed $500,000 Selling expenses-variable Selling expenses-fixed 90,000 60,000 Administrative expenses-variable 20,000 Administrative expenses-fixed 30,000 $20,000 20,000 10,000 10,000