Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

detailed answers for 18.34, with formula, thanks P18.34 Basic CVP relationships; income taxes: manufacturer LO18.7 Refer to the data given in Problem 18.33. Now assume

image text in transcribed

detailed answers for 18.34, with formula, thanks

image text in transcribedimage text in transcribed
P18.34 Basic CVP relationships; income taxes: manufacturer LO18.7 Refer to the data given in Problem 18.33. Now assume that Vine pays income taxes of 30 per cent. Required: 1. What is Vine's break-even point in units? 2. What is the company's break-even point in sales dollars? 3. How many units would Vine have to sell in order to earn a profit of $600 000 after tax? 4. What is the firm's safety margin? 5. If Vine's direct labour costs increase by 10 per cent, what selling price per unit must it charge to maintain the same contribution margin ratio?P18.33 Basic CVP relationships: manufacturer LO18.1 Vine Pty Ltd produces and sells bottles of wine. Price and cost data are in the following table 18.3 Selling price per bottle $ 37.50 18.4 18.5 Variable costs per bottle: Direct material $ 12.30 Direct labour 6.00 Manufacturing overhead 9.00 Selling costs 2.40 Total variable costs per bottle $ 29.70 Annual fixed costs: Manufacturing overhead $ 432000 Selling and administrative 621 000 Total fixed costs $1 053 000 Forecast annual sales (140000 units) $5 250 000 (In the following requirements, ignore income taxes.) Required: 1. What is Vine's break-even point in units? 2. What is the company's break-even point in sales dollars? 3. How many units would Vine have to sell in order to earn a profit of $570 000? 4. What is the firm's safety margin? 5. Management estimates that direct labour costs will increase by 10 per cent next year. How many units wil the company have to sell next year to reach its break-even point? 6. If Vine's direct labour costs do increase by 10 per cent, what selling price per unit must it charge to maintain the same contribution margin ratio

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Auditing Cases An Active Learning Approach

Authors: Mark S. Beasley, Frank A. Buckless, Steven M. Glover, Douglas F. Prawitt

2nd Edition

0130674842, 978-0130674845

Students also viewed these Accounting questions