Compute number of sprockets he needs to sell to break even

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Question - Spacely Company sells sprockets for $25. The following is the projected income statement for 2015. Variable costs are the cost of the sprockets, $.10 each, plus a 10% sales commission paid to the worker.

Sales - $200,000

Cost of Goods Sold - 80,000

Gross Margin - 120,000

Operating Expenses

Salaries and Commissions - 50,000

Rent -24,000

Other Fixed Expenses - 8,750

Total Operating Expenses - 82,750

Net Income - $37,250

For Spacely, the number of sprockets he needs to sell to break even are

A. 5,517

B. 4,220

C. 6,620

D. 5,020

E. none of these

Reference no: EM132188519

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