Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

need help with C, D and F please show work Eagle Company makes the MusIcFInder, a sophisticated satellite radlo. Eagle has experlenced a steady growth

need help with C, D and F
please show work
image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
Eagle Company makes the MusIcFInder, a sophisticated satellite radlo. Eagle has experlenced a steady growth In sales for the past five years. However, Ms. Luray, Eagle's CEO, belleves that to maintaln the company's present growth will require an aggressive advertising campalgn next year. To prepare for the campalgn, the company's accountant, Mr. Bednarik, has prepared and presented to Ms. Luray the following data for the current year, year 1: Variable costs: Direct labor (per unit) Direct materials (per unit) 24 91 Variable overhead (per unit) 43 19 Total variable costs (per unit) 24 153 Fixed costs (annual): Manufacturing Selling 394,000 282,000 0ue, Administrative Total fixed costs (annual) 1,473,000 Selling price (per unit) Expected sales revenues, year 1 (29,000 units) 413 $ 11,977,000 Eagle has an Income tax rate of 30 percent. Ms. Luray has set the sales target for year 2 at a level of $14,042,000 (or 34,000 radlos).
c. Ms. Luray believes that to attaln the sales target (34,000 radlos) willl require additional selling expenses of $283,000 for advertising in year 2, with all other costs remalning constant. What will be the after-tax operating profit for year 2 If the firm spends the additional $283.000?
d. What willl be the break-even point In sales dollars for year 2 If the firm spends the additional $283,000 for advertising?
f. At a sales level of 34,000 units, what Is the maximum amount the firm can spend on advertising to earn an after-tax operating profit of $767,000?
Eagle Company makes the MusicFinder, a sophisticated satellite radio. Eagle has experienced a steady growth in sales for the past five years. However, Ms. Luray. Eagle's CEO, belleves that to maintain the company's present growth will require an aggressive advertising campaign next year. To prepare for the campaign, the company's accountant, Mr. Bednarik, has prepared and presented to Ms. Luray the following data for the current year, year 1 91 43 19 $ 153 Variable costs Direct Labor (per unit) Direct materials (per unit) variable overhead (per unit) Total variable costs (per unit) Fixed costs (annual) Manufacturing Selling Administrative Total Fixed costs annual) Selling price (per unit) Expected sales revenues, year 1 (29,6ee units) 5 394,000 282,000 792.000 $ 1,473,000 413 $11.927.000 Eagle has an income tax rate of 30 percent Ms Luray has set the sales target for year 2 ot a level of $14,042,000 (or 34,000 radios) Required: 6. What is the projected after-tax operating profit for year 1? b. What is the break-even point in units for year 12 c. Ms. Luray believes that to attain the sales target (34,000 radios) will require additional selling expenses of $283.000 for advertising in year 2. with all other costs remaining constant. What will be the after-tax operating profit for year 2t the firm spends the additional $283,000? d. What will be the break-even point in sales dollars for year 2 of the firm spends the additional $283.000 for advertising e. If the firm spends the additional $283,000 for advertising in year 2. what is the sales leven doors required to equal the year 1 after-tax operating profit? t. At a sales level of 34.000 units, what is the maximum amount the firm con spend on advertising to earn an after-tax operating pront of $7570002 Required C Required D Required E Required F attain thcsales target (34,000 radios) will require additional selling e all other costs remaining constant. What will be the after-tax operatin 3,000? $ 4,961,500 X Required A Required B Required C Required D Red What will be the break-even point in sales dollars for year 2 if by computing volume in units first. Round up units to the nea whole dollar amount.) Break-even in sales CA $ 6,754

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

Accounting And Finance

Authors: Michael J. Jones

1st Edition

1118932072, 9781118932070

More Books

Students also viewed these Accounting questions

Question

Explain the benefits of a health and wellness strategy

Answered: 1 week ago

Question

Describe the components of a workplace wellness programme

Answered: 1 week ago