Question
Josh Ward is a young entrepreneur preparing to start a company that will sell floating lounge chairs for use in private pools. As part of
Josh Ward is a young entrepreneur preparing to start a company that will sell floating lounge chairs for use in private pools. As part of a loan package, the bank has asked him to prepare a business plan that includes a breakeven analysis. The lounge chairs will sell for $63 each and variable costs per unit are expected to be $45. Josh anticipates incurring $369,000 in fixed costs per year.
1) If Josh wants to generate annual operating income of $171,900, how many lounge chairs must he sell?
2)Assuming the companys tax rate is 30%, how many lounge chairs must the company sell to generate annual net income of $134,883?
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