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b.) Units that must be sold to break even.
c.) Units that must be sold to earn an operating income of
$500,000.
5.) Complete Dillon Corp.’s flexible budget for 75,000 units using the
information listed below:
25,000 Units
50,000
Units
Sales $375,000 $750,000
Cost of Goods Sold $250,000 $500,000
Gross Profit on Sales $125,000 $250,000
Operating expenses ($10,000 of
it is fixed) $35,000 $60,000
Operating Income $90,000 $190,000
Income Taxes (30% of operating
income) $27,000 $57,000
Net Income $63,000 $133,000
75,000
Units
Assume that cost of goods sold and any variable operating expenses
vary directly with sales and that income taxes remain constant at 30%.
6.) Del Sol Healthcare is considering two capital investment proposals.
The information for both projects is listed below: