Flip Corporation Income Statement For the Year Ended December 31, 2014
Sales (20,000 units) $600,000
Variable expenses 360,000
Contribution margin 240,000
Fixed expenses 150,000
Net income $ 90,000
Instructions: Answer the following independent questions and show computations to support your answers.
1. What is the company's break-even point in units?
2. How many more units would the company have had to sell to earn net income of $150,000 in 2014?
3. If the company expects a 25% increase in sales in 2015, what would be the expected net income in 2015?
4. How much sales dollars would the company have to generate in order to earn a target net income of $160,000 in 2015?