Question - Lakeland Inc. manufactures 1 GB flash drives (jump drives). Price and cost data for a relevant range extending to 200,000 units per month are as follows:
Sales price per unit (Current monthly sales volume is 130,000 units) $ 20.00
Variables cost per unit:
Direct materials 6.20
Direct labor 7.00
Variable manufacturing overhead 2.00
Variable selling and administrative expenses 1.80
Monthly fixed expenses:
Fixed manufacturing overhead $103,000
Fixed selling and administrative expenses 187,000
Lakeland's tax rate is 40 percent.
Requirements:
a) What would the company's operating income be if it sold 160,000 units?
b) What would the company's monthly operating income be if it had sales of $4,000,000?
c) What is the breakeven point in units? In sales dollars?
d) How many units would the company have to sell to earn a monthly net income of $260,100?