Henning Co

question 34

Essay

Henning Co. estimates that variable costs will be 70% of sales and fixed costs will total $2160000. The selling price of the product is $10 and 750000 units will be sold.
Instructions
Using the mathematical equation
(a) Compute the break-even point in units and dollars.
(b) Compute the margin of safety in dollars and as a ratio.
(c) Compute net income.

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Definitions:

Total Return

Represents the full return on an investment over a given time period, including capital gains, dividends, and interest.

Income Yield

The income returned on an investment, usually expressed as a percentage of the amount invested.

Cumulative Gain

The total amount of profit gained over a period of time from an investment or series of investments.

Semi-Annual Dividend

A payment made to shareholders that is distributed twice a year from a company's earnings.