danambjones
Feb 22, 2007, 10:55 AM
Barnes Corporation's income statement for last year appears below:
Sales 1,500,000
Cost of sales:
Direct materials 250,000
Direct labor (variable) 150,000
Variable overhead 75,000
Fixed overhead 100,000 575,000
Gross margin 925,000
Selling, general, and administrative:
Variable 200,000
Fixed 250,000 450,000
Net operating income 475,000
The management of Barnes Corporation anticipates a 10 percent increase in total sales, a 12 percent increase in total variable expenses, and a 45,000 increase in total fixed expenses next year. The break-even point for next year is:
(a) 214,018
(b) 729,027
(c) 474,000
(d) 862,103
Can someone please show me how to get the answer? Thanks!
Sales 1,500,000
Cost of sales:
Direct materials 250,000
Direct labor (variable) 150,000
Variable overhead 75,000
Fixed overhead 100,000 575,000
Gross margin 925,000
Selling, general, and administrative:
Variable 200,000
Fixed 250,000 450,000
Net operating income 475,000
The management of Barnes Corporation anticipates a 10 percent increase in total sales, a 12 percent increase in total variable expenses, and a 45,000 increase in total fixed expenses next year. The break-even point for next year is:
(a) 214,018
(b) 729,027
(c) 474,000
(d) 862,103
Can someone please show me how to get the answer? Thanks!