Question - High-Low Cost Estimation and Profit Planning
Comparative 2007 and 2008 income statements for Dakota Products Inc. follow:
DAKOTA PRODUCTS INC. Comparative Income Statements For Years Ending December 31, 2007 and 2008
2007 2008
Unit sales 5,000 8,000
Sales revenue $60,000 $96,000
Expenses (64,000) (76,000)
Profit (loss) $(4,000) $20,000
(a) Determine the break-even point in units.
(b) Determine the unit sales volume required to earn a profit of $5,000.