Break-Even Sales and Sales to Realize Operating Income  For the current year ending December 31, McAdams Industries expects fixed costs of $1,860,000, a unit 'ariable cost of $105, and a unit selling price of $125

A) Computation of Anticipated Break-even Sales (Units):

Anticipated Break-even Sales (Units) = Fixed Costs/Contribution Margin per Unit

= $1,860,000/($125-$105)

= $1,860,000/$20

Anticipated Break-even Sales (Units) = 93,000 units

So, Anticipated Break-even Sales (Units) is 93,000 units.

B) Computation of Sales (units) required to realize operating income of $500,000:

Required Sales Units = (Fixed Costs + Desired Income) / Contribution Margin per Unit

= ($1,860,000+$500,000)/($125-$105)

= $2,360,000/$20

Required Sales Units = 118,000 units

So, Sales (units) required to realize operating income of $500,000 is 118,000 units.