Raple Stark Company Income Statement For the Year Ended December 31 2006Sales (

Raple Stark Company
Income Statement
For the Year Ended December 31 2006Sales (25000 units x 26) $ 650000
Variable expenses 227500
Contribution margin 422500
Fixed expenses 439400
Net income (loss) $ (16900)Instructions
Answer the following independent questions and show computations to support your answers:
1. How much additional sales revenue does the company need to break-even in 2006?2. If the company is able to reduce variable costs by $1.25 per
unit in 2007 and other costs and unit revenues remain unchanged how
many units will the company have to sell in order to earn a net income
of $50650?