The employee may not be motivated immediately by a good appraisal because of the delay in receipt of any monetary reward. The evaluation also may not be taken as seriously by the employee if compensation is not correlated with performance.

Gains and losses similar to those that would not be deferred at year-end should not be deferred to later interim periods of the same year. Hence, the extraordinary gain should not be prorated. However, no items of income or expense are presented as extraordinary on the income statement or in the notes:

The breakeven point is determined by dividing total fixed costs by the unit contribution margin. The total fixed costs are US $9,331,200 $5,598,720 manufacturing overhead +$3,732,480 general and administrative). The contribution margin is US $16.00 $40 sales
price - $22 variable production cost-$2 commission). Thus, the breakeven point is 583,200
units US $9.331,200 - $16).