Hyland Company_Breakeven Analyasis

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5.       TheincomestatementforHylandCompanyfor2014 appearsbelow:

 

Hyland Company

Income Statement

For the Year Ended December 31, 2014

Salesrevenue(40,000 units)

1,000,000

Variableexpenses

700,000

Contributionmargin

300,000

Fixedexpenses

345,000

Netincome(loss)

(45,000)

 

Instructions

Answerthe followingindependentquestionsandshowcomputationstosupportyouranswers:

1.   Whatwasthecompany’sbreak-evenpointinsalesdollarsin2014?

2.   Howmanyadditionalunitswouldthecompanyhavetosellin2015 (comparedto2014) inorderto earnnetincomeof$45,000?

 

3.   Ifthecompanyisabletoreducevariablecostsby$4.50 perunitin2015 and othercostsandunit revenuesremainunchanged,howmanyunitswillthecompanyhavetosellinordertoearnanet incomeof$45,000?

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