Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Soft&Cuddle, Inc. produces and sells teddy bears for $30. To make one teddy bear it cost $12 for materials and $8.00 for labor. Rent on

image text in transcribed

Soft&Cuddle, Inc. produces and sells teddy bears for $30. To make one teddy bear it cost $12 for materials and $8.00 for labor. Rent on the facility for a month cost 49,000 and machine maintenance cost 6,000 each month Required 1) Compute the contribution margin per unit. 2) Compute the break-even point in units and dollars for a month. 3) How many units must be sold to earn an after tax profit of $14,520 (tax rate 40%)? ( 4) What would the break-even point in units be if instead of paying a flat fee for rent they paid S8 per bear to the landlord? 5) If they plan to sell 12,800 bears would they be better off with the fixed rent or the variable rent? Explain

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored 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

Students also viewed these Accounting questions

Question

How do you add two harmonic motions having different frequencies?

Answered: 1 week ago