Break-Even Sales and Cost-Volume-Profit Graph Last year, Ridgecrest Inc. had sales of $3,221,680, based on a unit selling price of $440. The variable cost per unit was $280, and fixed costs were $836,800. The maximum sales within Ridgecrest Inc.'s relevant range are 13,000 units. Ridgecrest Inc. is considering a proposal to spend an additional $168,000 on billboard advertising during the current year in an attempt to increase sales and utilize unused capacity. Using the cost-volume-profit graph prepared in part (1), determine (a) the operating income for last year and (b) the maximum operating income that could have been realized during the year. Operating income $ Maximum operating income $

Break-Even Sales and Cost-Volume-Profit Graph Last year, Ridgecrest Inc. had sales of $3,221,680, based on a unit selling price of $440. The variable cost per unit was $280, and fixed costs were $836,800. The maximum sales within Ridgecrest Inc.'s relevant range are 13,000 units. Ridgecrest Inc. is considering a proposal to spend an additional $168,000 on billboard advertising during the current year in an attempt to increase sales and utilize unused capacity. Using the cost-volume-profit graph prepared in part (1), determine (a) the operating income for last year and (b) the maximum operating income that could have been realized during the year. Operating income $ Maximum operating income $

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter6: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 4PA

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