(Break-even Analysis) Sword Company’s projected partial variable costing income statement for the coming year is as...
(Break-even Analysis) Sword Company’s projected partial variable
costing income statement for the coming year is as follows (at
30,000 units):
Total
Sales
$600,000
Less: Variable expenses
150,000
Contribution margin
$ 450,000
Less: Fixed expenses
210,000
Operating income
$ 240,000
Required:
1. Compute the break-even point in units.
2. For the projected level of sales, compute the margin of
safety.
3. How many units must be sold to earn a profit of $300,000?
4. Suppose Sword Company would like to earn operating income equal
to 25 percent of sales revenue. How many units must be sold for
this goal to be realized? Answer this question by making an
equation and prepare an income statement to prove your answer.
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(Break-even Analysis) Sword Company’s projected partial variable
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