ANSWER THE FOLLOWING QUESTIONS CORRECTLY

Last Year, Able Co, sold all the goods it produced(it had no finished goods inventories), and sales revenues were $1,260,000. It recorded the following costs for the year:

    Manufacturing        Selling and        Total

    Costs               Administrative        cost

                            Cost

Variable $420,000        $150,000       $570,000

Fixed      220,500        260,000        480,500

Total    $640,500        $410,000    $1,050,500

A. Prepare a Financial Reporting income Statement(that is, in the form required under GAAP for U.S. external reporting).

B. Determine income in the manner used in cost-volume-profit analysis using equation 2.2

profit=revenue-Variable costs-fixed costs

C. At what sales dollar level will Able earn a before-tax target profit of $250,000?

D. At what sales dollar level will Able Break Even?