1. Texas Company produces one product that it sells for $50 per unit. In producing that product, Texas

1. Texas Company produces one product that it sells for $50 per unit. In producing that product, Texas

1. Texas Company produces one product that it sells for $50 per unit. In producing that product, Texas Company incurs variable costs of $35 per unit and fixed costs of $400,000. How many units of the product will Texas Company have to produce and sell to earn a profit of $42,000? 2. Alabama Corporation and California Corporation have the same sales and profits as follows: Alabama CaliforniaSales $1,000,000 $1,000,000Variable Costs 600,000 400,000Contribution Margin 400,000 600,000Fixed Costs 200,000 400,000Profit 200,000 200,000Using an operating leverage analysis, determine how much profits would increase for each company if each experienced a 10% increase in sales.3. Virginia, LLC, sells its product for $20 and incurs variable costs in producing that product of $8 per unit and total fixed costs of $10,000. Using the contribution margin ratio approach, calculate the number of units of the product that Virginia, LLC must sell to generate a profit of $14,400.4. Arkansas Company provided the following information at the end of 2010: Beginning balance in Work-In-Progress $300,000Ending balance in Work-In-Progress 350,000Beginning balance in Finished Goods 400,000Ending balance in Finished Goods 350,000Direct materials costs 1,000,000Direct labor costs 2,000,000Manufacturing overhead 2,000,000Selling expenses 300,000General and administrative expenses 200,000Sales 8,000,000Prepare an income statement for fiscal year 2010.


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