Spotless, Inc., sells only one product. The sales price per unit is $50, with variable cost per unit of $40. Fixed costs are $60,000 per month. Maximum capacity is 34,000 units per month. Answer the following questions:

(a) To break-even, how many units must Spotless, sell per month? _____________ units
(b) If Spotless, Inc., sold 25,000 units, what would be its operating income for the month? $_________________
(c) At present capacity, what is the maximum operating income Spotless, can expect to earn per month? $_________________
(d) Assuming that direct labor cost can be reduced by $2 per unit, what would the maximum operating income be per month? $________________

Answer rating: 100% (QA)

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