Question - Blue Bell Industries manufactures a single product. This product sells for $105 each. When Blue Bell produces 5,000 units, the following manufacturing costs are incurred:

Direct materials                                $175,000

Direct labor                                         150,000

Variable mfg overhead                  50,000

Fixed mfg overhead                       402,000

Total mfg costs                                  $777,000

The selling and administrative costs are: Variable, $7 per unit; Fixed, $311,000.

Blue Bell's tax rate is 40%.

1. What is the break-even point in units? In dollars?

2. How many units does Blue Bell have to sell to earn a target net income of $48,300?

3. If sales of this product are 52,000 units, what is the net income?