Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Lexis Ltd. has estimated the following costs for producing and selling 15,000 units of its product: Direct materials $75,000 Direct labor 90,000 Variable overhead 45,000

Lexis Ltd. has estimated the following costs for producing and selling 15,000 units of its product:

Direct materials $75,000

Direct labor 90,000

Variable overhead 45,000

Fixed overhead 30,000

Variable selling and administrative expenses 60,000

Fixed selling and administrative expenses 40,000

Lexis Ltd.'s income tax rate is 40%.

a. Given that the selling price of one unit is $38, calculate how many units Lexis would have to sell in order to break even.

b. Assume the selling price is $43 per unit. Calculate how many units Lexis would have to sell in order to produce a profit of $25,000 before taxes.

c. Calculate what price Lexis would have to charge in order to produce a profit of $30,000 after taxes if 7,500 units were produced and sold.

d. Calculate what price Lexis would have to charge in order to produce a before-tax profit equal to 30% of sales if 10,000 units were produced and sold.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored 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

The Federal Budget Politics Policy Process

Authors: Allen Schick

1st Edition

0815777337, 978-0815777335

More Books

Students also viewed these Accounting questions

Question

Contrast the risk responses for threats and for opportunities.

Answered: 1 week ago