The income statement for Adelaide Ltd for 2017 appears below.
Instructions: 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 2017?
2. How many additional units would the company have had to sell in 2017 in order to earn a target profit of $60,000?
3. If the company is able to reduce variable costs by $2.00 per unit in 2018 and other costs and unit revenues remain unchanged, how many units will the company have to sell in order to earn a target profit of $50,000?

Question

The income statement for Adelaide Ltd for 2017 appears below.
  Instructions: 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 2017?
2. How many additional units would the company have had to sell in 2017 in order to earn a target profit of $60,000?
3. If the company is able to reduce variable costs by $2.00 per unit in 2018 and other costs and unit revenues remain unchanged, how many units will the company have to sell in order to earn a target profit of $50,000?

Quizplus · Accepted Answer

The Answer of The income statement for Adelaide Ltd for 2017 appears below.
  Instructions: 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 2017?
2. How many additional units would the company have had to sell in 2017 in order to earn a target profit of $60,000?
3. If the company is able to reduce variable costs by $2.00 per unit in 2018 and other costs and unit revenues remain unchanged, how many units will the company have to sell in order to earn a target profit of $50,000?

The Income Statement for Adelaide Ltd for 2017 Appears Below