Maurice Tutor

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    Argosy University/ Phoniex University/
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    Phoniex University
    Oct-2001 - Nov-2016

Category > Accounting Posted 22 Jul 2017 My Price 9.00

CHANGES IN VARIABLES

BREAK-EVEN IN SALES DOLLARS, CHANGES IN VARIABLES

Lauterbach Corporation manufactures skateboards and is in the process of preparing next year’s budget. The pro forma income statement for the current year is as follows:

Sales

 

$1,500,000

Cost of sales:

 

 

Direct materials

$250,000

 

Direct labor

150,000

 

Variable overhead

80,000

 

Fixed overhead

100,000

580,000

Gross profit

 

$ 920,000

Selling and administrative expenses:

 

 

Variable

$300,000

 

Fixed

250,000

550,000

Operating income

 

$ 370,000

Required:

1. What is the break-even point (rounded to the nearest dollar) for Lauterbach Corporation for the current year?

2. For the coming year, the management of Lauterbach Corporation anticipates a 10 percent increase in variable costs and a $45,000 increase in fixed expenses. What is the break-even point in dollars for next year?

Answers

Maurice Tutor
(5)
Status NEW Posted 22 Jul 2017 09:07 PM My Price 9.00

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