Question
Assignment questions Green Captain Solar manufactures and sells solar panels that can be added on to existing solar panel systems on individual homes and businesses.
Assignment questions Green Captain Solar manufactures and sells solar panels that can be added on to existing solar panel systems on individual homes and businesses. The market covers both new panels as well as recycled panels. For the year 2023 Green captain predicted the following: selling price of $600 per panel variable cost $300 fixed annual cost at $150,000 after tax profit $600,000 tax rate 20% The financial statements of Green Captain prepared in May 2023 indicated that the sales targets were not being met. For the first five months of 2023, only 700 panels had been sold at the established price, with variable costs as planned. It was clear the 2023 after-tax profit projection would not be reached unless some actions were taken. The CEO of Green Captain, Mr. David Thapa assigned a management accountant to undertake an analysis of the situation and come up with several alternative courses of action. The management accountant presented the following alternatives to the CEO. Bring down the sales price by $100. The sales department predicts that with this reduction, 3,500 panels can be sold during the remainder of the year. Total fixed and variable unit costs will remain the same. Bring down the variable cost per panel by $25 by sourcing lower quality raw materials and modifying manufacturing techniques. In addition, bring down the sales price by $90, with a sales of 2,800 panels predicted for the remainder of the 2023. 3 Bring down fixed costs by $30,000 and sales price by 10 percent. Variable costs per panel will remain the same, with a sale of 2,500 panels predicted for the remainder of the year. Required: 1. Assuming that there are no changes made to the selling price or the structure of costs, determine how many solar panels Green Captain must sell: a) To break even. b) To achieve its after-tax profit objective.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored 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