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The income statement for Baxter Company for 2008 appears below.
The income statement for Baxter Company for 2008 appears below.BAXTER COMPANYIncome StatementFor the year Ended December 31,2008-----------------------------------------------------Sales (40,000 units)....................$1,000,000Variable Expenses..........................700,000________Contribuation Margin.......................300,000Fixed Expenses.............................330,000_________Net income (loss)........................$(30,000)________________InstructionsAnswer the following independent questions and show computations using the contribution margin technique to support your answers:1. What was the company's break-even point in sales dollars in 2008?2. How many additional units would the company have had to sell in 2009 in order to earn net income of $30,000?3. If the company is able to reduce variable costs by $2.50 per unit in 2009 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 $35,000?
