King Manufacturing Company produces and sells a single product. The company's income statement for the most...

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King Manufacturing Company produces and sells a single product. The company's income statement for the most recent month is given below: Sales (9,000 units at $60 per unit). Less manufacturing costs: Direct materials..... Direct labor (variable). Variable factory overhead. ..$540,000 $59,000 70,000 18,000 26,000 173,000 367,000 Fixed factory overhead Gross margin. Less selling and other expenses: Variable selling and other expenses Fixed selling and other expenses Net operating income....... There are no beginning or ending inventories. 24,000 42,000 66,000 $ 301,000 Required: a. Compute the company's monthly break-even point in units of product. b. What would the company's monthly net operating income be if sales increased by 25% and there is no change in total fixed expenses? King Manufacturing Company produces and sells a single product. The company's income statement for the most recent month is given below: Sales (9,000 units at $60 per unit). Less manufacturing costs: Direct materials..... Direct labor (variable). Variable factory overhead. ..$540,000 $59,000 70,000 18,000 26,000 173,000 367,000 Fixed factory overhead Gross margin. Less selling and other expenses: Variable selling and other expenses Fixed selling and other expenses Net operating income....... There are no beginning or ending inventories. 24,000 42,000 66,000 $ 301,000 Required: a. Compute the company's monthly break-even point in units of product. b. What would the company's monthly net operating income be if sales increased by 25% and there is no change in total fixed expenses?

Answer rating: 100% (QA)

a To compute the companys monthly breakeven point in units of product we need to find the sales volu... View the full answer