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Mel's Accessories sells wallets and money clips. Historically, the firm's sales have averaged three wallets for every money clip. Each wallet has an $8 contribution
Mel's Accessories sells wallets and money clips. Historically, the firm's sales have averaged three wallets for every money clip. Each wallet has an $8 contribution margin, and each money clip has a $6 contribution margin. Mel's incurs fixed cost in the amount of $180,000. The selling prices of wallets and money clips, respectively, are $30 and $15. The corporate-wide tax rate is 40 percent. a. How much revenue is needed to break even? $ 630,000 How many wallets and money clips does this represent? 18,000 wallets 6,000 money clips b. How much revenue is needed to earn a pre-tax profit of $150,000? Note: Do not round until you determine the number of units of each product; round number of units to the next highest whole unit in your calculations. $ 1,155,000 c. How much revenue is needed to earn an after-tax profit of $150,000? Note: Do not round until you determine the number of units of each product; round number of units to the next highest whole unit in your calculations. $ 875,000 X CVP Austin Automotive sells an auto accessory for $180 per unit. The company's variable cost per unit is $30 for direct material, $25 per unit for direct labor, and $17 per unit for overhead. Annual fixed production overhead is $37,400, and fixed selling and administrative overhead is $25,240. a. What is the contribution margin per unit? $ 108 b. What is the contribution margin ratio? 1,060 X %
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