Question

Adams Company makes and sells products with variable costs of $24 each. Adams incurs annual fixed...

Adams Company makes and sells products with variable costs of $24 each. Adams incurs annual fixed costs of $321,280. The current sales price is $88.

Note: The requirements of this question are interdependent. For example, the $256,000 desired profit introduced in Requirement c also applies to subsequent requirements. Likewise, the $80 sales price introduced in Requirement d applies to the subsequent requirements.

f. If variable cost rises to $30 per unit, what level of sales is required to earn the desired profit? Express your answer in units and dollars. Prepare an income statement using the contribution margin format.

If variable cost rises to $30 per unit, prepare an income statement using the contribution margin format.

ADAMS COMPANY
Income Statement

If variable cost rises to $30 per unit, what level of sales is required to earn the desired profit? (Do not round intermediate calculations. Round your final answers to the nearest dollar and round units up to the next whole unit.)

Sales volume in units
Sales volume in dollars

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