(a) Ace Company reports sales of $80,000, variable costs of $20,000, and net income of $30,000. What is the breakeven level in sales dollars? Why?
(b) Oro Company sells a single product at a price of $60 per unit. Materials, labor, and variable overhead costs per unit are $16, $12, and $7, respectively. Annual fixed costs are $880,000. Oro is subject to a 30% income tax rate. What annual sales revenue is required to achieve an annual after tax net income of $224,000? Why?
(c) Snyder makes fans with material costs of $10 per unit and direct labor cost of $7 per unit. A local carrier charges Snyder $5 per unit to deliver fans sold to customers. Sales commissions are paid at 10 of the selling price. Fans are sold for $100 each. Indirect factory and administrative costs are $6,800 and $37,200, respectively. How many fans must Snyder sell to break-even. Why?