Question
Ronald Enterprises Ltd. has estimated the following costs for producing and selling 17,000 units of its product: Direct materials $85,000Direct labour 102,000Variable overhead 51,000 Fixed
Ronald Enterprises Ltd. has estimated the following costs for producing and selling 17,000 units of its product:
Direct materials
$85,000Direct labour
102,000Variable overhead
51,000
Fixed overhead
30,000Variable selling and administrative expenses
51,000Fixed selling and administrative expenses
37,500
Ronald Enterprises' income tax rate is 40%.
Given that the selling price of one unit is $37, calculate how many units Ronald Enterprises would have to sell in order to break even.
Break-even units
Assume the selling price is $42 per unit. Calculate how many units Ronald Enterprises would have to sell in order to produce a profit of $24,000 before taxes.
Target units
units
Calculate what price Ronald Enterprises would have to charge in order to produce a profit of $27,000 after taxes if 7,500 units were produced and sold.
Ronald Enterprises should charge
$
per unit
Calculate what price Ronald Enterprises would have to charge in order to produce a before-tax profit equal to 30% of sales if 9,000 units were produced and sold. (Round answer to 2 decimal places, e.g. 15.25.)
Ronald Enterprises should charge
$
per unit
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