Question
Problem #1- CVP Analysis (16 Points): SHOW ALL WORK Enola, Inc., manufactures a product that sells for $800. Fixed costs are $750,000. The variable costs
Problem #1- CVP Analysis (16 Points): SHOW ALL WORK
Enola, Inc., manufactures a product that sells for $800. Fixed costs are $750,000. The variable costs per unit are as follows:
Direct materials | $300 |
Direct labor | 140 |
Variable manufacturing overhead | 85 |
Required:
a. | a. Determine the break-even point in units. (Hint: You must compute total variable costs and total fixed costs)
b. Determine the break-even sales dollars |
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c. | Determine the number of units that must be sold to earn $200,000 in profit before taxes. |
d. | Determine the number of units that must be sold to generate an after-tax profit of $110,000 if there is a 35 percent tax rate. |
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