The income statement for Hyland Company for 2014 appears below:

The income statement for Hyland Company for 2014 appears below:

 

           Hyland Company

           Income Statement

For the Year Ended December 31, 2014

 

Sales revenue (40,000 units)       1,000,000

Variable expenses                       700,000 

Contribution margin                       300,000

Fixed expenses                            345,000

Net income (loss)                          (45,000)

 

Instructions

Answer the following independent questions and show computations to support your answers:

1. What was the company’s break-even point in sales dollars in 2014?

2. How many additional units would the company have to sell in 2015 (compared to 2014) in order to 

earn net

income of $45,000?

3. If the company is able to reduce variable costs by $4.50 per unit in 2015 and other costs and unit 

revenues remain unchanged, how many units will the company have to sell in order to earn a net 

income of $45,000?