Question:
BREAK-EVEN IN UNITS, TARGET INCOME
Glass-Works, Inc., makes and sells a variety of cut glass vases. Fixed costs are $216,000 per year. The average price for a cut glass vase is $24, and the average variable cost is $16 per item.
Required:
1. How many vases must be sold to break even?
2. If Glass-Works wants to earn $130,000 in profit, how many vases must be sold? Prepare a variable-costing income statement to verify your answer.