(Answered) Problem - study companys income statement for 2012 appears

Accounting

Problem - Study Company's income statement for 2012 appears below.

STUDY COMPANY Income Statement For the Year Ended December 31, 2012

Sales (40,000 units) $1,000,000

Variable expenses 700,000

Contribution margin 300,000

Fixed expenses 345,000

Net income (loss) $ (45,000)

Answer the following independent questions and show computations using the contribution margin technique to support your answers:

1. What was the company's break-even point in sales dollars in 2012?

2. How many additional units would the company have had to sell in 2013 in order to earn net income of $45,000?

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