Question
Snow Company had the following results for last year (2022): Number of Units Produced and Sold 20,000 units Sales $300,000 Variable Period Costs 20,000 Fixed
Snow Company had the following results for last year (2022): Number of Units Produced and Sold 20,000 units Sales $300,000 Variable Period Costs 20,000 Fixed Period Costs 40,000 Variable Product Costs 100,000 Fixed Product Costs 110,000 Income Before Tax 30,000 Income Tax 7,500 Net Income $22,500 Assuming that the units of sales = the units of production and that is the only cost driver, answer each of the following INDEPENDENT questions. Please SHOW YOUR WORK!! a. What is the break-even point in dollars? b. If Snow sells 24,000 UNITS next year, how much net income after tax will they earn? c. How many dollars must Snow sell next year to earn $45,000 of income before tax? d. If factory rent is expected to increase by $12,000 next year, how many UNITS must Snow sell to earn $27,000 of net income after tax e. Snow wants to increase sales next year by increasing their advertising. If the marketing department thinks they can sell a total of 28,000 units if you increase the advertising, by how many dollars can you increase advertising and still earn Income Before Tax of $42,000?
Assuming that the units of sales = the units of production and that is the only cost driver, answer each of the following INDEPENDENT questions. Please SHOW YOUR WORK!! a. What is the break-even point in dollars? b. If Snow sells 24,000 UNITS next year, how much net income after tax will they earn? c. How many dollars must Snow sell next year to earn $45,000 of income before tax? d. If factory rent is expected to increase by $12,000 next year, how many UNITS must Snow sell to earn $27,000 of net income after tax e. Snow wants to increase sales next year by increasing their advertising. If the marketing department thinks they can sell a total of 28,000 units if you increase the advertising, by how many dollars can you increase advertising and still earn Income Before Tax of $42,000Step by Step Solution
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