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Hurst Co. manufactures and sells a single product. Price and cost data regarding this product...

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Accounting

Hurst Co. manufactures and sells a single product. Price and cost data regarding this product are as follows:
Selling Price $40 per unit
Variable Manufacturing Costs $20 per unit
Variable SG+A $6 per unit
Expenses:
Fixed MOH $208,000 per year
Fixed SG+A $324,000 per year
Required:
a) What is the break-even point in units per year?
b) How many units need to be sold to earn an annual operating income equal to 10% of Sales?
c) In the current year, the company sold 43,000 units. Due to competition, management will be
forced to lower the selling price by 10% next year. How many units must be sold next year to earn the
same operating income as was earned in the current year?
d) Provide 2 potential options for reducing the number of break-even units calculated above
other than increasing or keeping the same sales price.

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