The company's Accounting Department has determined the break-even point to be 14,000 units per month, computed...

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The company's Accounting Department has determined the break-even point to be 14,000 units per month, computed as follows: Fixed cost per month Unit contribution margin $420,000 = 14,000 units $30 per unit On receiving this figure, the president commented, "There's something peculiar here. The comptroller says that the break-even point is 14,000 units per month. Yet we sold only 13,000 units in May, and the income statement we received showed a $2,000 profit. Which figure do we believe?" Prepare a brief explanation of what happened on the May income statement. The company's Accounting Department has determined the break-even point to be 14,000 units per month, computed as follows: Fixed cost per month Unit contribution margin $420,000 = 14,000 units $30 per unit On receiving this figure, the president commented, "There's something peculiar here. The comptroller says that the break-even point is 14,000 units per month. Yet we sold only 13,000 units in May, and the income statement we received showed a $2,000 profit. Which figure do we believe?" Prepare a brief explanation of what happened on the May income statement.

Answer rating: 100% (QA)

Based on the information provided the companys breakeven point is 14000 units per month which means ... View the full answer