# Break-even point/Net operating income

1. South Company sells a single product for $20 per unit. If variable expenses are 60% of sales and fixed expenses total $9,600, the break-even point will be:

A. $24,000

B. $14,400

C. $9,600

D. $16,000

2. Arthur Company has a margin of safety percentage of 25%. The break-even point is $300,000 and the variable expenses are 45% of sales. Given this information, the net operating income is:

A. $75,000

B. $55,000

C. $15,000

D. $41,250

https://brainmass.com/business/accounting/break-even-point-net-operating-income-133323

#### Solution Preview

1. The contribution margin is 1-60%=40%. The contribution margin per unit is 20X40%=$8.

Breakeven units = Fixed Cost/Contribution margin per unit = 9,600/8=1,200

Breakeven Sales ...

#### Solution Summary

The solution explains the calculation of break-even point and net operating income

$2.19