50000 Depreciation on administrative equipment 12000 Administrative expenses

50000 depreciation on administrative equipment 12000

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(50,000) Depreciation on administrative equipment (12,000) Administrative expenses (71,950) Fixed cost (193,950) Net income $31,050 Requirement b Break-even in units Fixed cost $193,950 ------------------------------- = -------------- = 4,310 units Contribution margin/unit $45 Break-even in dollars 4,310 units x $120 = $517,200 Requirement c Budgeted sales - Break-even sales $600,000 - $517,200 ---------------------------------------------------- = ------------------------------ = 13.8% Budgeted sales $600,000 3-56
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