Answered step by step
Verified Expert Solution
Question
1 Approved Answer
QUESTION 5 Canterbury Ltd manufactures and sells a single product, a wireless doorbell for $50 per unit. Variable costs are $30 per unit and total
QUESTION 5 Canterbury Ltd manufactures and sells a single product, a wireless doorbell for $50 per unit. Variable costs are $30 per unit and total fixed costs for the current period (2020) are $40,000. Required: Calculate the break-even point in units AND in dollars for Canterbury Ltd. Show all workings. You may utilise following formulas: Profit = Total Revenue - Total Costs Profit = Total Revenue - Total Variable Costs) - Total Fixed Costs Profit = [(Selling price per unit - Variable cost per unit) * Quantity sold) - Total fixed cost Contribution Margin = Total revenue - Total variable costs Contribution Margin Ratio = Contribution Margin per unit Sales / price per unit Units to Breakeven = Total Fixed Costs / Contribution Margin per unit Revenue to Breakeven = Fixed costs / Contribution Margin ratio Pre-tax profit - After-tax profit/(1-Tax rate) Sales Quantity for Targeted Pre-tax Profit = (Fixed costs + Profits/Contribution Margin per unit Sales Revenue for Targeted Pre-tax Profit = (Fixed costs + Profit)/Contribution Margin Ratio Pre-tax Profit = After-tax profit/(1 - Tax rate) Arial 3 (12pt) T-E
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started