1) Break Even Point in Units
Unit Selling Price = 600,000/20,000 = $30
Unit Variable Cots = 360,000/20,000 = $18
Unit Contribution Margin $30 – $18 = $12
Fixed Costs = 150,000
Unit contribution Margin = $12
Break Even Point in Units = 150,000/$12 = 12,500
2) Required Units Sold = (150,000+150,000)/12 = 25000 Units
(25,000-20,000) = 5000 More Units
3) 20,000*1.25= 25,000
Sales 25,000*$30 = 750,000
Variable Expenses 25,000*18 = 450,000
Contribution Margin 25,000*12= 300,000
Fixed Expenses = 150,000
Net Income = 300,000-150,000= 150,000
4) 240,000/600,000 = 40%
(150,000 + 160,000) / 40% = 775,000
1) May 31 Work in Process Inventory 12500
Manufacturing Overhead 1000