Hyland Company_Breakeven Analyasis

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Description

5. TheincomestatementforHylandCompanyfor2014
appearsbelow:

Hyland Company

Income Statement

For the Year
Ended December 31, 2014

Salesrevenue(40,000 units)

1,000,000

Variableexpenses

700,000

Contributionmargin

300,000

Fixedexpenses

345,000

Netincome(loss)

(45,000)

Instructions

Answerthe followingindependentquestionsandshowcomputationstosupportyouranswers:

1. Whatwasthecompany’sbreak-evenpointinsalesdollarsin2014?

2. Howmanyadditionalunitswouldthecompanyhavetosellin2015
(comparedto2014) in
orderto earnnetincomeof$45,000?

3. Ifthecompanyisabletoreducevariablecostsby$4.50 perunitin2015 and othercostsandunit revenuesremainunchanged,howmanyunitswillthecompanyhavetosellinordertoearnanet incomeof$45,000?

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