A firm has the following income statement for a month. 3,000 units at $80/unit Sales: Less:...
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A firm has the following income statement for a month. 3,000 units at $80/unit Sales: Less: Cost of Goods Sold. Variable Production Cost Fixed Production Cost Gross Margin Selling and Administrative Expenses Variable Selling Cost Fixed Selling Expenses $11,700 Net Income Before Taxes $240,000 180,000 19,800 40,200 21,000 7,500 1. Find the firm's breakeven output. 2. If it wishes to have a monthly net income before taxes of $18,000 and its cost structure remains as above, what quantity of output will it need to sell? 3. If its variable production costs increase by $4 per unit, what will be its breakeven output? 4. After the increase in costs in 3, what output will it need to sell if it wishes to have the $18,000 monthly pretax profit stated earlier? A firm has the following income statement for a month. 3,000 units at $80/unit Sales: Less: Cost of Goods Sold. Variable Production Cost Fixed Production Cost Gross Margin Selling and Administrative Expenses Variable Selling Cost Fixed Selling Expenses $11,700 Net Income Before Taxes $240,000 180,000 19,800 40,200 21,000 7,500 1. Find the firm's breakeven output. 2. If it wishes to have a monthly net income before taxes of $18,000 and its cost structure remains as above, what quantity of output will it need to sell? 3. If its variable production costs increase by $4 per unit, what will be its breakeven output? 4. After the increase in costs in 3, what output will it need to sell if it wishes to have the $18,000 monthly pretax profit stated earlier?
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solution 1Break even pointunits Fixed costcontribution per unit Total fixed cost Fixed production co... View the full answer
Related Book For
Basic Finance An Introduction to Financial Institutions Investments and Management
ISBN: 978-1111820633
10th edition
Authors: Herbert B. Mayo
Posted Date:
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