Assuming the following information: XYZ Company is proposed to sell a new product. The company...
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Accounting
Assuming the following information:
XYZ Company is proposed to sell a new product. The company predicts that it can sell the product for $25 and that it will have a variable cost of $17.50. The company expects its fixed costs to be $330,000.
Answer the following independent questions and show computations.
1. What is the break-even point in units and in dollars?
2. How many units must be sold to reach a desired net income of $50,000?
3. How many units must be sold to reach a desired net income of $50,000 if the sales price is changed to $30, the variable cost to $17 and the fixed costs to $300,000?
4. What is the margin of safety if actual sales turned out to be $1,300,000?
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