Question

Using the below financial statements, determine certainnumber of variable costs and a fixed costs for the month of Dec.2016 and calculate the following:

Breakeven point in units

Breakeven point in $S

Assume a target income and determine how many units you need tosell in order to make your target income.

LINDSEY’S LIP SETS

Schedule of Cost of Goods Manufactured

For the Year Ending December 31, 2016

Direct Materials:
	Beginning Raw Materials Inventory, Jan. 1	$100,000
	Plus: Net purchases of raw material	$200,000
	Raw materials available	$300,000
	Less: Ending raw materials inventory, Dec. 31	$150,000
	Raw materials transferred to production		$150,000
	Direct Labor		$200,000
Manufacturing Overhead
	Indirect materials	$10,000
	Indirectlabor	$45,000
	FactoryDepreciation	$10,000	$65,000
Total manufacturing costs			$415,000
Beginning work in process inventory Jan.1			$50,000
Cost of goods manufactured			$530,000
Less: Ending work in process inventory, Dec. 31			$2,000
Cost of goods manufactured			$528,000

LINDSEY’S LIP SETS

Schedule of Cost of Goods Sold

For the Year Ending December 31 2016

Beginning finished goods inventory, Jan. 1	$20,000
Plus: Cost of goods manufactured	$528,000
Goods available forsale	$548,000
Less: Finished goods inventory, Dec. 31	$10,000
Cost of goodssold	$538,000

LINDSEY’S LIP SETS

Income Statement

For the Year Ending December 31 2016

Sales			$3,200,000
Cost of goods sold			$538,000
Gross profit			$2,662,000
Operating expenses
	Online shop selling	$24,000
	General administrative	$10,000	$34,000
Net income			$2,628,000