Personal Computing Services (PCS) sells computer and computer support for small businesses. During the current year, it was able to sell 1,000 computers at $1, 500 each. The computers cost PCS $900 each and the salespeople receive a commission of 5% of the sales price. Fixed costs are as follows: Rent $50,000, Salaries $120,000, Business Tax $1,000 and Advertising $35,000.
1. Compute PCS sales revenue for the year.
2. Compute the total variable costs for the year.
3. Compute the total fixed costs for the year.
4. Determine PCS net income for the year.
5. Determine what is PCS breakeven point in number of units of
6. Determine PCS breakeven point in terms of dollar sales.
7. Determine what PCS sales revenue (in dollars) would have to order for PCS to earn a target net income or profit of $400,000.