McCallen Company expects to produce and sell 500 units next month. Data on costs follows:
Per unit costs:
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Per unit costs:
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Selling price
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$8
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Variable manufacturing costs
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$2.75
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Variable selling costs
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$0.25
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Total costs:
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Fixed manufacturing costs
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$1,000
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Fixed selling costs
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$ 125
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Required:
A.What is the break-even point in units?
B.What is the break-even point in sales dollars?
C.What is the expected operating income for next month?
D.What is the margin of safety in dollars?
E.What is the break-even point in units if fixed manufacturing costs increase by $500?
F.What is the break-even point in units if variable manufacturing costs decrease by $.75?