Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Regardless of your answer in previous part, assume that more than the allowed production of 30,500 units will be required to meet the $91,500 net
Regardless of your answer in previous part, assume that more than the allowed production of 30,500 units will be required to meet the $91,500 net income target. Given the production constraint (maximum of 30,500 units available), what price must be charged to meet the target income and continue production past the next fiscal year?
*Problem 3-34 (Part Level Submission) Ivanhoe Company has developed a new product that will be marketed for the first time next year. The product will have variable costs of $19 per unit. Although the marketing department estimates that 42,700 units could be sold at $39 per unit, Ivanhoe's management has allocated only enough manufacturing capacity to produce a maximum of 30,500 units a year. The fixed costs associated with the new product are budgeted at $549,000 for the year Ivanhoe is subject to a 40% tax rate Your answer is correct. Calculate contribution margin per unit. Contribution margin per unit s20 Attempts: 2 of 15 used (a2) Your answer is correct. How many units of the new product must Ivanhoe sell in the next fiscal year to break even? (Use the rounded contribution margin per unit calculated in the previous part.) 27,450 units Attempts: 1 of 15 used Your answer is correct. What is the maximum net income that Ivanhoe can earn from sales of the new product in the next fiscal year? (Use the rounded contribution margin per unit calculated in the previous part.) Maximum net income $36,600 Your answer is correct Ivanhoe's managers have stipulated that they will not authorize production beyond the next fiscal year unless the after-tax profit from the new product is at least $91,500. How many units of the new product must be sold in the next fiscal year to ensure continued production? (Use the rounded contribution margin per unit calculated in the previous part. Round answer to o decimal places, e.g. 5,275.) 35,075 units Attempts: 1 of 15 used Regardless of your answer in previous part, assume that more than the allowed production of 30,500 units will be required to meet the $91,500 net income target. Given the production constraint (maximum of 30,500 units available), what price must be charged to meet the target income and continue production past the next fiscal year? Price $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