1. Compute break-even point in units. 2. Compute break-even point in sales dollars.

Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter2: Basic Managerial Accounting Concepts
Section: Chapter Questions
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Required information
[The following information applies to the questions displayed below.]
Hudson Company reports the following contribution margin income statement.
HUDSON COMPANY
Contribution Margin Income Statement
For Year Ended December 31
Sales (11,200 units at $280 each).
Variable costs (11,200 units at $210 each)
Contribution margin
Fixed costs
Income
1. Compute break-even point in units.
2. Compute break-even point in sales dollars.
1. Break-even units
2. Break-even sales dollars
units
$ 3,136,000
2,352,000
784,000
567,000
$ 217,000
Transcribed Image Text:Required information [The following information applies to the questions displayed below.] Hudson Company reports the following contribution margin income statement. HUDSON COMPANY Contribution Margin Income Statement For Year Ended December 31 Sales (11,200 units at $280 each). Variable costs (11,200 units at $210 each) Contribution margin Fixed costs Income 1. Compute break-even point in units. 2. Compute break-even point in sales dollars. 1. Break-even units 2. Break-even sales dollars units $ 3,136,000 2,352,000 784,000 567,000 $ 217,000
Required information
[The following information applies to the questions displayed below.]
Hudson Company reports the following contribution margin income statement.
Sales (11,200 units at $280 each)
Variable costs (11,200 units at $210 each)
Contribution margin
Fixed costs
Income
HUDSON COMPANY
Contribution Margin Income Statement.
For Year Ended December 31
1. Amount of sales
2. Margin of safety
$ 3,136,000
2,352,000
1. Assume Hudson has a target income of $156,000. What amount of sales (in dollars) is needed to produce this target income?
2. If Hudson achieves its target income, what is its margin of safety (in percent)? (Round your answer to 1 decimal place.)
%
784,000
567,000
$ 217,000
Transcribed Image Text:Required information [The following information applies to the questions displayed below.] Hudson Company reports the following contribution margin income statement. Sales (11,200 units at $280 each) Variable costs (11,200 units at $210 each) Contribution margin Fixed costs Income HUDSON COMPANY Contribution Margin Income Statement. For Year Ended December 31 1. Amount of sales 2. Margin of safety $ 3,136,000 2,352,000 1. Assume Hudson has a target income of $156,000. What amount of sales (in dollars) is needed to produce this target income? 2. If Hudson achieves its target income, what is its margin of safety (in percent)? (Round your answer to 1 decimal place.) % 784,000 567,000 $ 217,000
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