Answered step by step
Verified Expert Solution
Link Copied!

Question

00
1 Approved Answer

question help EXERCISE 414 Break-Even and Target Prot Analysis [I L03, L04, L05, L06] New Tech Limited manufactures and sells wireless phone chargers. The product

question help

image text in transcribed
EXERCISE 414 Break-Even and Target Prot Analysis [I L03, L04, L05, L06] New Tech Limited manufactures and sells wireless phone chargers. The product sells for $30 per unit and has a CM ratio of 50%. The company's xed expenses are $450,000 per year. Required: \"L124 1. What are the variable expenses per unit? 2. What is the annual break-even point in units and in sales dollars? 3. What annual sales level in units and in sales dollars is required to earn target operating income of $150,000? Ignore taxes. 4. Assume that New Tech is able to reduce variable costs by $3 per unit but to do so will increase xed costs by $54,000. What is the company's new annual breakeven point in units? 5. Referring to the original data, what sales level in dollars is required to earn an annual target prot of $100,000 after taxes if the company's tax rate is 20%

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered 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

Financial Accounting

Authors: Robert Libby, Patricia Libby, Daniel Short, George Kanaan, M

5th Canadian edition

9781259105692, 978-1259103285

Students also viewed these Accounting questions