Use this income statement and your calculations from the Unit 3.1 Practice Exercise to answer the following questions.
|
Sales ($50 per unit) |
$5,000 |
|
|
Less: Cost of goods sold ($32 per unit) |
3,200 |
|
|
Gross margin |
1,800 |
|
|
Less operating expenses: |
||
|
Salaries |
$800 |
|
|
Advertising |
400 |
|
|
Shipping ($2 per unit) |
200 |
1,400 |
|
Operating Income |
$ 400 |
- How many units would the company need to sell to earn $2,000 in operating income?
- How many units would the company need to sell to earn $1,140 in net income if the tax rate is 25%?
- By how much would operating income change with a 10% increase in units sold?