Question - Pitre, Inc. earned net income of $150,000 during 2010. The company wants to earn net income of $25,000 more during 2011. The company's fixed costs have been and are expected to remain at $40,000. Variable costs have also maintained stability at 20% of sales; this rate is expected to continue into 2011. Pitre, Inc. sells watches for $60 each.
Instructions:
a) Determine break even in dollars for 2011.
b) Determine the required sales in dollars to meet the target net income during 2011.
c) List at least two ways Pitre Company could earn their target net income of $175,000.