Grove Company manufactures and markets a number of products. Mangement is considering the futrue of Product A, which has not been as profitable as planned. Because this product is manufactured and market independtly from other products its total cost can be precisely measured. The plan for next year calls for a selling price of 480 dollars per unit. The fixed costs for the year are expected to be $300,000, up to the maximum capacity of 2500 units. the forcasted variable costs are $180 per unit.
Required:
a. Predict the break even point for Prodcut A in terms of [a] units and b dollars of sales.
b. Prepare an income statement showing sales, fixed costs, and variable costs for product A at the break even point.
c. Determine the sales volume in dollars that the company must acheive to earn $231,000 income for from Product A, after income taxes are assessed at 30%