Oldman River Company expects to produce and sell 2,000 units next month. Data on costs follows:
Per unit costs:
Selling sales price $40
Variable manufacturing costs $10
Variable selling costs $ 6
Total costs:
Fixed manufacturing costs $16,000
Fixed selling costs $ 8,000
A. Calculate the break-even point in units.
B. Calculate the break-even point in sales dollars.
C. Calculate the expected operating income for next month.
D. Calculate the margin of safety in dollars.

Question

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The Answer of Oldman River Company expects to produce and sell 2,000 units next month. Data on costs follows:
Per unit costs:
Selling sales price $40
Variable manufacturing costs $10
Variable selling costs $ 6
Total costs:
Fixed manufacturing costs $16,000
Fixed selling costs $ 8,000
A. Calculate the break-even point in units.
B. Calculate the break-even point in sales dollars.
C. Calculate the expected operating income for next month.
D. Calculate the margin of safety in dollars.

Oldman River Company Expects to Produce and Sell 2,000 Units