What is the operating profit-loss


Question: Howard Beal co. manufactures molds for casting aluminum alloy test samples. Fixed costs amount to $20,000 per year. Variable costs for each unit manufactured are $16. Sales price per unit is $28.

a. What is the contribution margin of the product?

b. Calculate the break-even point in unit sales and dollars.

c. What is the operating profit (loss) if the company manufactures and sells:

(i) 1,500 units per year?
(ii) 3,000 units per year?

d. Plot a break-even chart using the foregoing figures.

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Finance Basics: What is the operating profit-loss
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