Answered step by step
Verified Expert Solution
Question
00
1 Approved Answer
Exercise 3.27 Stellar produces one single product, a small reading tablet, and sells it at $130 per unit. Its current annual sales are $312,000. Its
Exercise 3.27 Stellar produces one single product, a small reading tablet, and sells it at $130 per unit. Its current annual sales are $312,000. Its annual fixed costs include factory rent, 562,400; depreciation expense: equipment, $15,600; utilities, $31,200; insurance, $12,480. Its variable costs include materials, $39 per unit, and direct labour, $52 per unit. Stellar's income tax rate is 20%. What is the contribution margin per unit? Contribution margin per unit LINK TO TEXT LINK TO TEXT LINK TO TEXT What is the contribution margin ratio? Contribution margin ratio % LINK TO TEXT LINK TO TEXT LINK TO TEXT How many units must Stellar sell to break even? (Round answer to the next whole integer, e.g. 1,255.) Sales units LINK TO TEXT LINK TO TEXT LINK TO TEXT If Stellar would like to earn a profit after tax of $15,000, what should the sales be? At this sales level, what is the degree of operating leverage? What is the margin of safety in unit? (Round total sales and margin of safety to O decimal places, e.g. 5,125. Round degree of operating leverage to 2 decimal places, e.g. 15. 16.) Total Sales Degree of operating leverage Margin of safety units LINK TO TEXT LINK TO TEXT LINK TO TEXT If Stellar would like to earn a profit after tax that is 8% of sales, what should the sales be? How many units does Stellar need to increase from the current sales level? Total Sales Units to be increased by units LINK TO TEXT LINK TO TEXT LINK TO TEXT
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