Question
Amazon Inc. sells only 2 products, X and Y. She sells 3 units of product X for each 2 units of product Y Amazon's
Amazon Inc. sells only 2 products, X and Y. She sells 3 units of product X for each 2 units of product Y Amazon's tax rate is 25% Additional information for Amazon is as follows: Product X Selling price $50 Product Y $90 Total Variable cost per unit $40 $70 Total fixed costs $700,000 Required: 1) Calculate the breakeven point in units and sales dollars for each product. (8 points) 2) Calculate the number of units that would have to be sold to make an after-tax income of $210,000, assuming Amazon's tax rate is 25% (5 points) 3) The manager of product X has the opportunity to sell an additional 10,000 units as a one-time special order. Variable costs per unit will increase to $46 and an additional delivery run will be made at a cost of $10,000. Should Amazon make this sale? (5 points)
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started