Zeta Corp's Most Recent Income Statement Is Given Below Required

question 4

Essay

Zeta Corp's most recent income statement is given below.
$\begin{array}{lr}\text { Sales }(8,000 \text { units }) & \$ 160,000 \\\text { Less variable expenses } & (68,000)\\\text { Contribution margin } & 92,000 \\\text { Less fixed expenses } & (50,000) \\\text { Net income }&\$42,000\end{array}$ Required:
$\begin{array} { l l } \text {a.Contribution margin per unit is }&\$\_\_\_\_ \text { per unit }\\ \text {b. If sales are doubled to \( \$ 240,000 \), total variable costs will equal }&\$\_\_\_\_ \\ \text {c.If sales are doubled to \( \$ 240,000 \), total fixed costs will equal }&\$\_\_\_\_ \\ \text {d. If 20 more units are sold, profits will increase by}&\$\_\_\_\_ \\ \text { e. Compute how many units must be sold to break even.}&\#\_\_\_\_ \\ \text {f.Compute how many units must be sold to achieve profits of \( \$ 60,000 \). }&\#\_\_\_\_ \\\end{array}$

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Definitions:

Investing Activities

Transactions involving the purchase and sale of long-term assets and other investments, included in a company's cash flow statement.

Statement of Cash Flows

A financial statement that shows how changes in balance sheet accounts and income affect cash and cash equivalents.

Common Stock

Equity ownership in a corporation, giving shareholders voting rights and a share in the company's profits, usually through dividends.

Financing Activities

Transactions and events where cash is raised for the business through borrowing or issuing equity, reflected in the cash flow statement.