McKenzie Company expects to produce and sell 1000 units next month.Data on costs follows:
$\begin{array}{lc}
\text { Per unit costs: } & \
\text { Selling price } & \$ 8 \
\text { Variable manufacturing costs } & \$ 2.75 \
\text { Variable selling costs } & \$ 0.25 \
& \
\text { Total costs: } & \$ 1,000 \
\text { Fixed manufacturing costs } & \$ 125 \
\text { Fixed selling costs } & \$ 125
\end{array}$ A. What is the break-even point in units?
B. What is the break-even point in sales dollars?
C. What is the expected operating income for next month?
D. What is the margin of safety in dollars?
E. What is the break-even point in units if fixed manufacturing costs increase by $ \$ 500 $ ?
F. What is the break-even point in units if variable manufacturing costs decrease by $ \$ 0.75 $ ?

Question

McKenzie Company expects to produce and sell 1000 units next month.Data on costs follows:
 $\begin{array}{lc}
\text { Per unit costs: } & \
\text { Selling price } & \$ 8 \
\text { Variable manufacturing costs } & \$ 2.75 \
\text { Variable selling costs } & \$ 0.25 \
& \
\text { Total costs: } & \$ 1,000 \
\text { Fixed manufacturing costs } & \$ 125 \
\text { Fixed selling costs } & \$ 125
\end{array}$ A. What is the break-even point in units?
B. What is the break-even point in sales dollars?
C. What is the expected operating income for next month?
D. What is the margin of safety in dollars?
E. What is the break-even point in units if fixed manufacturing costs increase by $ \$ 500 $ ?
F. What is the break-even point in units if variable manufacturing costs decrease by $ \$ 0.75 $ ?

Quizplus · Accepted Answer

The Answer of McKenzie Company expects to produce and sell 1000 units next month.Data on costs follows:
 $\begin{array}{lc}
\text { Per unit costs: } & \
\text { Selling price } & \$ 8 \
\text { Variable manufacturing costs } & \$ 2.75 \
\text { Variable selling costs } & \$ 0.25 \
& \
\text { Total costs: } & \$ 1,000 \
\text { Fixed manufacturing costs } & \$ 125 \
\text { Fixed selling costs } & \$ 125
\end{array}$ A. What is the break-even point in units?
B. What is the break-even point in sales dollars?
C. What is the expected operating income for next month?
D. What is the margin of safety in dollars?
E. What is the break-even point in units if fixed manufacturing costs increase by $ \$ 500 $ ?
F. What is the break-even point in units if variable manufacturing costs decrease by $ \$ 0.75 $ ?

McKenzie Company Expects to Produce and Sell 1000 Units Next