Hyland Company Breakeven Analysis
Hyland Company, The income statement for Hyland Company for2014 appears below:
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Income Statement For the Year Ended December 31, 2014 |
|
Sales revenue(40,000 units) | 1,000,000 |
Variableexpenses | 700,000 |
Contributionmargin | 300,000 |
Fixedexpenses | 345,000 |
Net income(loss) | (45,000) |
Instructions
Answer the following independent questions and show computations to support your answers:
1. What was the company’s break-even point in sales dollars in2014?
2. How many additional units would the company have to sell in2015 (comparedto2014) in order to earnnetincomeof$45,000?
3. If the company is able to reduce variable costs by $4.50 per uniti n2015 and other costs and unit revenues remain unchanged,how many units will the company have to sell in order to earn net incomeof$45,000?
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