Hyland Company Breakeven Analysis

Hyland Company Breakeven Analysis

Hyland Company, The income statement for Hyland Company for2014 appears below:

Hyland Company

Income Statement

For the Year Ended December 31, 2014

Sales revenue(40,000 units) 1,000,000
Variableexpenses 700,000
Contributionmargin 300,000
Fixedexpenses 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 in2014?

2. How many additional units would the company have to sell in2015 (comparedto2014) in order to earnnetincomeof$45,000?

3. If the company is able to reduce variable costs by $4.50 per uniti n2015 and other costs and unit revenues remain unchanged,how many units will the company have to sell in order to earn net incomeof$45,000?

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