A company was planning to have two cost structures plan dealing with containers. It has high variable cost pu containers with lower annual fixed costs It has lower variable cost with higher fixed cost. Plan A: Per container revenue=100 Variable cost per container delivered=85 Cost=1,200,000 Plan B: Per container revenue=100 Variable cost per container delivered=60 Cost=4,500,000 Required: 1.BEP (In volumes) for both the plans 2.Under plan A to produce an operating income of 30,000? Containers to be made under plan A to produce an operating margin which is equal to 9% of sales revenue in total. 4.At the tax rate of 40%, under plan B to produce net income of 180,000, how many containers to be made.
A company was planning to have two cost structures plan dealing with containers. It has high variable cost pu containers with lower annual fixed costs It has lower variable cost with higher fixed cost. Plan A: Per container revenue=100 Variable cost per container delivered=85 Cost=1,200,000 Plan B: Per container revenue=100 Variable cost per container delivered=60 Cost=4,500,000 Required: 1.BEP (In volumes) for both the plans 2.Under plan A to produce an operating income of 30,000? Containers to be made under plan A to produce an operating margin which is equal to 9% of sales revenue in total. 4.At the tax rate of 40%, under plan B to produce net income of 180,000, how many containers to be made.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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A company was planning to have two cost structures plan dealing with containers.
- It has high variable cost pu containers with lower annual fixed costs
- It has lower variable cost with higher fixed cost.
Plan A:
Per container revenue=100
Variable cost per container delivered=85
Cost=1,200,000
Plan B:
Per container revenue=100
Variable cost per container delivered=60
Cost=4,500,000
Required:
1.BEP (In volumes) for both the plans
2.Under plan A to produce an operating income of 30,000?
- Containers to be made under plan A to produce an operating margin which is equal to 9% of sales revenue in total.
4.At the tax rate of 40%, under plan B to produce net income of 180,000, how many containers to be made.
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