1)18-% - Cost Volume Profit-Show your calculations, how you arrived at your answer. A company has a selling price of $30 per unit, variable costs of $10 per unit and fixed costs of $50,000. a. 4% - What quantity must be sold to earn a profit of $80,000? b. 2% - What is the firm's total contribution margin at breakeven? c. 4% - How much revenue is needed to make an after-tax profit of $140,000? Assume a tax rate of 10%. d. 4% - Assume we have been selling 14,000 units. What is the net income if there is a 10% increase in units sold? e. 4% - By how much can fixed cost increase, if the firm increases its sales price by $5 and wants to make a profit of $50,000 by selling 10,000 units?
1)18-% - Cost Volume Profit-Show your calculations, how you arrived at your answer. A company has a selling price of $30 per unit, variable costs of $10 per unit and fixed costs of $50,000. a. 4% - What quantity must be sold to earn a profit of $80,000? b. 2% - What is the firm's total contribution margin at breakeven? c. 4% - How much revenue is needed to make an after-tax profit of $140,000? Assume a tax rate of 10%. d. 4% - Assume we have been selling 14,000 units. What is the net income if there is a 10% increase in units sold? e. 4% - By how much can fixed cost increase, if the firm increases its sales price by $5 and wants to make a profit of $50,000 by selling 10,000 units?
Chapter3: Cost-volume-profit Analysis
Section: Chapter Questions
Problem 22MC: If a firm has a contribution margin of $59,690 and a net income of $12,700 for the current month,...
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Transcribed Image Text:1)18-% - Cost Volume Profit-Show your calculations, how you arrived at your answer.
A company has a selling price of $30 per unit, variable costs of $10 per unit and fixed costs
of $50,000.
a. 4% - What quantity must be sold to earn a profit of $80,000?
b. 2% - What is the firm's total contribution margin at breakeven?
c. 4% - How much revenue is needed to make an after-tax profit of $140,000? Assume
a tax rate of 10%.
d. 4% - Assume we have been selling 14,000 units. What is the net income if there is a
10% increase in units sold?
e. 4% - By how much can fixed cost increase, if the firm increases its sales price by $5
and wants to make a profit of $50,000 by selling 10,000 units?
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