Checkerbox Company Has a Predicted Operating Income of $97,500

question 218

Essay

Checkerbox Company has a predicted operating income of $97,500.
Their total variable expenses are $42,000 and their total fixed expenses are $96,000. They have a unit contribution margin of $15.
1. Calculate the required sales in units to achieve the predicted operating income.
2. Calculate the required sales in units to achieve the predicted operating income if the company's fixed expenses double from $96,000 to $192,000.

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Definitions:

Financing Statement

A document filed to give public notice that a lender has a security interest in a debtor's asset, used in securing financing.

Perfected

In law, refers to a state where a security interest or lien secures payment or performance of an obligation to its fullest legal extent.

Security Interest

A legal claim or lien on collateral that secures the performance of an obligation, usually repayment of a debt.

Collateral

An asset offered to secure a loan or other credit and subject to seizure upon default.