Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Sota Inc. sells a single product for $43. Its management estimates the following revenues and costs for the year 2016: Required: Assuming fixed costs and
Sota Inc. sells a single product for $43. Its management estimates the following revenues and costs for the year 2016: Required: Assuming fixed costs and net sales are spread evenly throughout the year, determine Sota's monthly break-even point in (a) units and (b) dollars. Calculate the contribution margin ratio, the annual margin of safety ratio, and the annual profit Determine the percentage increase of annual profits if Sota Inc. increases its selling price by 30% and all other factors (including demand) remain constant. Assume the price remains at $43 per unit and variable costs remain the same per unit, but fixed costs increase by 25% annually. Calculate the percentage increase in unit sales required to achieve the same level of annual profit calculated in required # 2 Determine the sales required to earn an operating income of $350,000 after tax. Sota Inc.'s income tax is 35%
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