Chapter 5, Problem 19P

1.

To determine

Concept introduction:

Net operating income: Net operating income also called NOI, is the revenue from the property, after deducting all the necessary operating expenses. It is basically a calculation which is used to identify the profitability of income generating from investments. The net operating income does not include capital expenditure.

Break-even point: Break-even point is the point at which the costs incurred equals to the revenue earned. That means there is no profit or loss.

Net operating income or loss for the year.

2.

To determine

Concept introduction:

Net operating income: Net operating income also called NOI, is the revenue from the property, after deducting all the necessary operating expenses. It is basically a calculation which is used to identify the profitability of income generating from investments. The net operating income does not include capital expenditure.

Break-even point: Break-even point is the point at which the costs incurred equals to the revenue earned. That means there is no profit or loss.

The product’s break-even points in unit sales and dollar sales.

3.

To determine

Concept introduction:

Net operating income: Net operating income also called NOI, is the revenue from the property, after deducting all the necessary operating expenses. It is basically a calculation which is used to identify the profitability of income generating from investments. The net operating income does not include capital expenditure.

Break-even point: Break-even point is the point at which the costs incurred equals to the revenue earned. That means there is no profit or loss.

Maximum annual profit that can earn on the product and what sales volume and selling price per unit generate maximum profit.

4.

To determine

Concept introduction:

Net operating income: Net operating income also called NOI, is the revenue from the property, after deducting all the necessary operating expenses. It is basically a calculation which is used to identify the profitability of income generating from investments. The net operating income does not include capital expenditure.

Break-even point: Break-even point is the point at which the costs incurred equals to the revenue earned. That means there is no profit or loss.

Break-even point in units and dollar using selling price determined in requirement 3 and the reason for difference between these two break-even points.