Question - Dotted, Inc., sells only one product. The sales price per unit is $50, with variable cost per unit of $40. Fixed costs are $60,000 per month. Maximum capacity is 34,000 units per month. Answer the following questions:
(a) To break-even, how many units must Dotted, sell per month?
(b) If Dotted, Inc., sold 25,000 units, what would be its operating income for the month?
(c) At Maximum capacity, what is the maximum operating income Dotted, can expect to earn per month?
(d) Assuming that direct labor cost can be reduced by $2 per unit, what would the maximum operating income be per month?