Question
The following data refer to a single product, the TECHWHIZ, made by the Markdata Computer Company: Sales price = $5,519 Direct materials cost (including purchased
The following data refer to a single product, the TECHWHIZ, made by the Markdata Computer Company:
Sales price = $5,519
Direct materials cost (including purchased components) = $885
Direct labor cost = $230
Facilities costs (for a highly automated plant; mainly includes rent, insurance, taxes, and depreciation) = $2,321,700 per year
Required:
1. What is the contribution margin per unit?
2. What is the breakeven point, in units and in dollars? (Do not round intermediate calculations. Round up your answer to the next whole unit.)
3. What is the required level of sales (in units) if the company plans to increase facilities costs by 4% (to improve product quality and appearance) and has a desired before-tax profit (B) of $200,000? (Do not round intermediate calculations. Round up your answer to the next whole unit.)
4. If the companys income tax rate is 24%, what unit sales are necessary to achieve an after-tax profit (A) of $170,000? (Do not round intermediate calculations. Round up your answer to the next whole unit.)
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