The Davidson Company's breakeven point in units is 40,000.Assuming that variable costs are 60% and fixed costs are $300,000,what is the company's projected operating income if sales are $1,000,000?

Question

Quizplus · Accepted Answer

The operating income can be calculated using the formula: Operating Income = Total Sales - Total Variable Costs - Fixed Costs. Given that sales are $1,000,000, variable costs are 60% of sales (which equals $600,000), and fixed costs are $300,000, the operating income is $1,000,000 - $600,000 - $300,000 = $100,000.

The Davidson Company's Breakeven Point in Units Is 40,000