Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Please help me with question 3. Explain all steps. Show all work Super Sales Company is the exclusive distributor for a high-quality knapsack. The product

Please help me with question 3. Explain all steps. Show all work

image text in transcribed

image text in transcribed

Super Sales Company is the exclusive distributor for a high-quality knapsack. The product sells for $60 per unit and has a CM ratio of 40%. The company's fixed expenses are $360,000 per year. The company plans to sell 17,000 knapsacks this year. Required: 1. What are the variable expenses per unit? ed Variable expenses per unit $ 36 2. Use the equation method for the following: a. What is the break-even point in units and in sales dollars? 15,000 Break-even point in units Break-even point in sales dollars 900 000 b. What sales level in units and in sales dollars is required to earn an annual profit of $90,000? 18,750 Sales in units Sales in dollars 1,125,000 c. What sales level in units is required to earn an annual after-tax profit of $90,000 if the tax rate is 25%? Sales in units 20,000 d. Assume that through negotiation with the manufacturer, Super Sales Company is able to reduce its variable expenses by $3 per unit. What is the company's new break-even point in units and in sales dollars? (Do not round intermediate calculations. Round your final answers to the nearest whole number.) 13,333 New break-even point in units New break-even point in sales dollars 800,000 3. Use the formula method for the following: a. What is the break-even point in units and in sales dollars? Break-even point in units Break-even point in sales dollars 10,000 X $ 600,000 b. What sales level in units and in sales dollars is required to earn an annual profit of $90,000? 12,500 Sales in units Sales in dollars $ 750,000 c. What sales level in units is required to earn an annual after-tax profit of $90,000 if the tax rate is 25%? Sales in 13,334 units d. Assume that through negotiation with the manufacturer, Super Sales Company is able to reduce its variable expenses by $3 per unit. What is the company's new break-even point in units and in sales dollars? (Do not round intermediate calculations. Round your final answers to the nearest whole number.) New break-even point in units New break-even point in sales dollars 9,231 x $ 553,860

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

Auditing Corporate Surveillance Systems Research Methods For Greater Transparency

Authors: Isabel Wagner

1st Edition

1108837662, 978-1108837668

More Books

Students also viewed these Accounting questions

Question

Know how procedures protect an organization

Answered: 1 week ago