Question
Information for Melong Industries is provided below. Average selling price per unit $10.00 Average variable costs per unit Cost per unit 5.00 Selling Costs 1.40
Information for Melong Industries is provided below.
Average selling price per unit $10.00
Average variable costs per unit
Cost per unit 5.00
Selling Costs 1.40
Annual fixed costs:
Selling240,000
Administration 380,000
After tax profit target126,000
Tax rate 30%
Required:
A. Calculate thebefore-tax profit
B. Calculate the number of units thatneed to be sold in 2015 to reach the after tax profit target.
C. If the sales units in 2015 should be 25 per cent less than required to meet the after tax profit target, what will theafter tax profit actually be?
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