ACCOUNTING-Company X produces a molded hard plastic covers for I-pads

QUESTION

Company X produces a molded hard plastic covers for
I-pads. Summary data from its 2014
income statement are as follows:
·
Revenues –
$3,000,000
·
Variable costs –
$2,100,000
·
Fixed costs
– $1,050,000
·
Operating income
– ($150,000)

Re-calculate the breakeven
revenues if variable costs are 58% of revenues.

Calculate Freddie Corporation’s
operating income for 2014 if variable costs had been 58% of revenues.

ANSWER:

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