ABC Manufacturing has a plant with fixed costs of $400,000 and a production capacity of 100,000 units annually. Its product sells with a 40% contribution margin. The target profit is $200,000. At full production, what does the selling price per unit need to be?

ABC Manufacturing has a plant with fixed costs of $400,000 and a production capacity of 100,000 units annually. Its product sells with a 40% contribution margin. The target profit is $200,000. At full production, what does the selling price per unit need to be?

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter16: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 10E: Schylar Pharmaceuticals, Inc., plans to sell 130,000 units of antibiotic at an average price of 22...

See similar textbooks

Related questions

Q: help me to solve this questions

A: 1. EBIT at 9,500 pairsRevenue = Selling price * Quantity sold = 75 * 9,500…

Q: Cash and cash equivalents:3200, Accounts receivable:210

A: Understanding the Quick Ratio The quick ratio, also known as the acid-test ratio, is a liquidity…

Q: 4 POINT

A: Explanation of Days' Receivables (Days Sales Outstanding - DSO):Days' Receivables, also known as…

Q: Can you help me with accounting questions

A: Step 1: Definition of Labor Efficiency VarianceLabor efficiency variance measures the difference…

Q: Please help me

A: To calculate the direct materials price variance:Budgeted Price = $6 per poundActual Price = $6.10…

Q: Hi expert please help me this question

A: To calculate the gross profit percentage:Gross Profit Percentage = (Gross Profit / Sales) *…

Q: Do fast answer of this accounting questions

A: Step 1: Definition of Units of Activity DepreciationThe units of activity depreciation method…

Q: Hello tutor please help me this question general accounting

A: Data:PBO on January 1st: $241,000PBO on December 31st: $279,000Pension Plan Assets (Fair Value) on…

Q: !??

A: Concept of Net SalesNet sales refer to the total revenue a company earns from selling goods or…

Q: abc general accounting

A: Step 1: Definition of Inventory TurnoverInventory turnover is an efficiency ratio that measures how…

Q: Phoenix Industries has twelve million shares outstanding, generates free cash flows of $75 million…

A: Step-by-Step Solution 1. Understand the Given InformationShares Outstanding: 12 millionAnnual Free…

Q: correct answer please

A: How to calculate it:1. Calculate the Retention Ratio:Retention Ratio = 1 - Dividend Payout…

Q: none

A: Step 1: Definition of Cost of Merchandise Sold (COGS)Cost of Merchandise Sold (COGS) refers to the…

Q: subject- general accountant

A: Step 1: Definition of Contribution MarginThe contribution margin (CM) represents the portion of…

Q: Problem related general Accounting

A: ROA:ROA measures how efficiently a company uses its assets to generate net income. It is expressed…

Q: The partnership of Keenan and Kludlow paid the following wages during this year: Line Item…

A: First, we need to identify the employees and their earnings. In this case, the partners (M. Keenan…

Q: Need correct answer general Accounting

A: Step 1: Define ROA and ROEReturn on Assets (ROA) measures how efficiently a company generates profit…

Q: none

A: Step 1: Definition of Estimated Sales Returns and Allowance for Sales ReturnsEstimated Sales Returns…

Q: What is the percentage return on your investment of this financial accounting question?

A: Step 1: Define Percentage Return on InvestmentThe percentage return on investment (ROI) measures the…

Q: Please solve this general accounting questions

A: To determine total assets, we sum up all the asset accounts. Based on the given information, the…

Q: need help this questions

A: The correct labor quantity variance calculation follows the formula: (Actual Hours−Standard…

Q: Walker Manufacturing uses a predetermined overhead rate based on direct labor cost to apply…

A: Explanation of Predetermined Overhead Rate: A predetermined overhead rate is a calculated rate…

Q: Please give me true answer this financial accounting question

A: Step 1: Definition of Holding Period Return Holding Period Return measures the total return earned…

Q: Do fast answer of this accounting questions

A: Step 1:Profit margin is the financial metric that shows the net profit percentage earned by the…

Q: Determine whether the manufacturing overhead for 2023 was overallocated of underallocated

A: Concept of Manufacturing OverheadManufacturing overhead includes all indirect costs associated with…

Q: It's acid-test ratio equals

A: Concept of Quick AssetsQuick assets are highly liquid assets that a company can quickly convert into…

Q: Need help this question

A: Given data:Annual Sales = $379.3 millionIndustry Average DSO = 51.2 daysCalculate Daily Sales:Daily…

Q: Please give me true answer this financial accounting question

A: Step 1: Define Total Dollar ReturnThe Total Dollar Return measures the total gain or loss on an…

Q: Quick answer of this accounting questions

A: Step 1: Definition of Price-Earnings Ratio (P/E Ratio)The Price-Earnings Ratio (P/E Ratio) is a…

Q: Provide accurate answer

A: Step 1: Contribution Margin can be calculated by subtracting the total variable expenses from the…

Q: calculate the gross margin ratio.

A: Step 1: Definition of Gross Margin RatioThe gross margin ratio, also known as the gross profit…

Q: Using the high-low method

A: Concept of High-Low MethodThe high-low method is a technique used in cost accounting to separate…

Q: Hy expert give me solution

A: The Holding Period Returns (HPR) for Alpha Corp and Beta Ltd:Formula for Holding Period Return…

Q: none

A: Step 1:Direct material cost is the cost incurred in the purchasing of raw materials. Direct material…

Q: Using the high-low method

A: Concept of High-Low MethodThe high-low method is a cost estimation technique used to separate fixed…

Q: Can you please solve this questions

A: We have given, Sales for the year were $640,000, and the company estimates that 6% of all sales will…

Q: Kindly help me with accounting questions

A: Step 1: Definition of Absorption CostingAbsorption costing is a costing method where all…

Q: shareholders equity ?

A: Step 1: Definition of Shareholders' EquityShareholders' equity represents the residual interest in a…

Q: The direct material price variance is

A: The direct material price variance is calculated as follows: Direct material price variance =…

Q: What is the dollar amount of taxes paid on these financial accounting question?

A: Step 1: Define Definition of Taxes PaidTaxes paid refer to the amount a company owes to the…

Q: General Accounting

A: Step 1: Define Overhead Applied to Work in ProcessOverhead Applied to Work in Process refers to the…

Q: Wellness medical group has total equity of solve this problem general Accounting

A: Step 1: Define Return on Equity (ROE)Return on Equity (ROE) measures how efficiently a company…

Q: give me this Financial Accounting answer

A: Step 1: Define Sales Price per UnitThe sales price per unit represents the amount at which each unit…

Q: How much does he need before tax of this financial accounting question?

A: Step 1: Define Before-Tax IncomeBefore-tax income, also known as gross income, is the total amount…

Q: can you please solve this

A: Step 1: Definition of Net IncomeNet Income is the company's total earnings after deducting all…

Q: Compute the company's degree of opereting leverage

A: Step 1: Definition of Degree of Operating LeverageDegree of Operating Leverage (DOL) measures how a…

Q: Hello tutor give me correct answer general accounting

A: Step 1: Definition of SalesSales refer to the total revenue generated by a company from selling…

Q: Kindly help me with accounting questions

A: Step 1: Definition of LiabilitiesLiabilities represent the financial obligations a company owes to…

Q: ??

A: Step 1: Definition of Accounts Receivable Collection PeriodThe days to collect from customers, also…

Q: Tutor please provide answer

A: Explanation of Period Costs:Period costs refer to expenses that are not directly tied to production…

Question

100%

Need help with this question solution general accounting

ABC Manufacturing has a plant with fixed costs of $400,000 and a
production capacity of 100,000 units annually. Its product sells
with a 40% contribution margin. The target profit is $200,000. At
full production, what does the selling price per unit need to be?

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Similar questions

Schylar Pharmaceuticals, Inc., plans to sell 130,000 units of antibiotic at an average price of 22 each in the coming year. Total variable costs equal 1,086,800. Total fixed costs equal 8,000,000. (Round all ratios to four significant digits, and round all dollar amounts to the nearest dollar.) Required: 1. What is the contribution margin per unit? What is the contribution margin ratio? 2. Calculate the sales revenue needed to break even. 3. Calculate the sales revenue needed to achieve a target profit of 245,000. 4. What if the average price per unit increased to 23.50? Recalculate: a. Contribution margin per unit b. Contribution margin ratio (rounded to four decimal places) c. Sales revenue needed to break even d. Sales revenue needed to achieve a target profit of 245,000
Faldo Company produces a single product. The projected income statement for the coming year, based on sales of 200,000 units, is as follows: Required: 1. Compute the unit contribution margin and the units that must be sold to break even. Suppose that 30,000 units are sold above the break-even point. What is the profit? 2. Compute the contribution margin ratio and the break-even point in dollars. Suppose that revenues are 200,000 greater than expected. What would the total profit be? 3. Compute the margin of safety in sales revenue. 4. Compute the operating leverage. Compute the new profit level if sales are 20 percent higher than expected. 5. How many units must be sold to earn a profit equal to 10 percent of sales? 6. Assume the income tax rate is 40 percent. How many units must be sold to earn an after-tax profit of 180,000?
If a company has fixed costs of $6.000 per month and their product that sells for $200 has a contribution margin ratio of 30%, how many units must they sell in order to break even? A. 100 B. 180 C. 200 D. 2,000
Polaris Inc. manufactures two types of metal stampings for the automobile industry: door handles and trim kits. Fixed cost equals 146,000. Each door handle sells for 12 and has variable cost of 9; each trim kit sells for 8 and has variable cost of 5. Required: 1. What are the contribution margin per unit and the contribution margin ratio for door handles and for trim kits? 2. If Polaris sells 20,000 door handles and 40,000 trim kits, what is the operating income? 3. How many door handles and how many trim kits must be sold for Polaris to break even? 4. CONCEPTUAL CONNECTION Assume that Polaris has the opportunity to rearrange its plant to produce only trim kits. If this is done, fixed costs will decrease by 35,000, and 70,000 trim kits can be produced and sold. Is this a good idea? Explain.
Delta Co. sells a product for $150 per unit. The variable cost per unit is $90 and fixed costs are $15,250. Delta Co.s tax rate is 36% and the company wants to earn $44,000 after taxes. What would be Deltas desired pre-tax income? What would be break-even point in units to reach the income goal of $44,000 after taxes? What would be break-even point in sales dollars to reach the income goal of $44000 after taxes? Create a contribution margin income statement to show that the break-even point calculated in B, generates the desired after-tax income.
How much sales are required to earn the target income?
Pioneer Manufacturing has fixed costs of $60,000 and variable costs of $40 per unit. If they sell each unit for $100, how many units must be sold to earn a target profit of $40,000? (Round your answer). General Account
Dove, Inc. produces a product that has a variable cost of $6.00 per unit. The company's fixed costs are $60,000. The product is sold for $9.00 per unit and the company desires to earn a target profit of $30,000. What is the amount of sales that will be necessary to earn the desired profit?
Dove, Inc. produces a product that has a variable cost of $6.00 per unit. The company's fixed costs are $60,000. The product is sold for $9.00 per unit and the company desires to earn a target profit of $30,000. What is the amount of sales that will be necessary to earn the desired profit?need answer this question
What does the selling price per unit need to be? General accounting question
Please need answer
What amount sales is necessary to earn desired profit?