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1. The following information for Marge and Sara's Ice Cream Company is given for April: Sales $180,000 Fixed manufacturing costs 22,000 Fixed marketing and administrative
1. The following information for Marge and Sara's Ice Cream Company is given for April: Sales $180,000 Fixed manufacturing costs 22,000 Fixed marketing and administrative costs 14,000 Total fixed costs 36,000 Total variable costs 120,000 Unit price $9 Unit variable manufacturing cost 5 Unit variable marketing cost 1 Compute the following: a. Operating profit when sales are $180,000 (as above). b. Break-even number in units. c. Number of units sold that would produce an operating profit of $30,000. d. Sales dollars required to generate an operating profit of $20,000 e. Number of units sold in April. f. Number of units sold that would produce an operating profit of 20 percent of sales dollars. 2. Refer to the data for Self-Study Question 1. The following two questions are independent of each other. a. Holding everything else constant, what contribution margin per unit is required for the company to make an operating profit of $30,000 if the sales volume is 20,000 units? b. Assume a tax rate of 30 percent of before-tax operating profit. What sales volume in dollars is required for the company to earn an after-tax profit of $40,000
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