Pricher Corporation”s income statement for last year appears below:
|
Sales |
|
$2,000,000 |
|
Cost of goods sold: |
|
|
|
Direct materials |
$500,000 |
|
|
Direct labor (variable) |
150,000 |
|
|
Variable manufacturing overhead |
50,000 |
|
|
Fixed manufacturing overhead |
600,000 |
|
|
Gross margin |
$500,000 |
1,300,000 |
|
Selling and administrative expenses: |
150,000 |
700,000 |
|
Variable |
100,000 |
|
|
Fixed |
300,000 |
400,000 |
|
Net operating income |
|
$ 300,000 |
The break even point last year was:
A) $1,500,000
B) $2,571,429
C) $1,250,000
D) $900,000