Problem: The income statement for ABC’s 2012 fiscal year is presented below. ABC manufactures one type of street lamp used on municipal roads.
|
Sales
|
2,400,000
|
|
Variable cost of goods sold
|
1,680,000
|
|
Variable sales commissions
|
120,000
|
|
Contribution margin
|
600,000
|
|
Selling expense
|
105,000
|
|
Sales commissions expense
|
48,000
|
|
Administrative expense
|
212,000
|
|
Net income
|
235,000
|
|
Variable costs per unit are £6.
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|
Complete the following:
Please note: Round all answers to two decimal places.
1. Calculate break-even in pounds.
2. Calculate break-even in units.
3. Calculate break-even in pounds if the sales price increases by 10% and fixed costs increase by £12,000.
4. Calculate break-even in pounds if total sales increases by 10% and fixed costs increase by 10%.
5. Calculate sales (in pounds) to achieve £600,000 after tax. (Note: Thetax rate is 40%.)