Exercise #1 The company has a plant capasity of 220,000 units. Variable costs are $4,000,000...
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Exercise #1 The company has a plant capasity of 220,000 units. Variable costs are $4,000,000 at this level. Fixed costs are $2,000,000 per year. The company sells each unit for $40. a, compute the break-even point in units and in dollars b. how many units would have to be sold to earn net income SI 50,000 per year? Use fotal cost equation Exercise N2 Carolina Furniture Company is operating at almost 100% of capacity. The company expects sales to increase by 25% in next year. To satisfy the demand for its product, the company is considering two alternatives: the first alternative would increase fixed costs by 15%, but not affect variable costs. The second alternative would not affect fixed costs but increase variable costs to 60% of the selling price of the company's product This is Carolina Furniture Company's condensed income statement for current year: $3,600,000 Sales Costs variable fixed $1.520,000 $600,000 Income before taxes S2,180.000 $1.420.000 1. Determine the break-even point in sales dollars for the next year under each of the alternatives, 2. Determine projected income for the next year under each of the alternatives 3. Which alternative would you recommend
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