None Crest Industries sells a single model of satellite radioreceivers for use in the home. The radios have the followingprice and cost characteristics:=Sales price $80 per radioVariable costs = $32 per radioFixed costs = $360 per monthCrest Industries is subject to an income tax rate of 40percent. How many receivers must Crest sell to earn amonthly operating profit of $90,000 after taxes?

Step 1: Define Marginal CostingMarginal costing is a decision-making technique that managers use to…

Answered: Crest Industries sells a single model…

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 16E

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Sheridan Dish Printery publishes the best-selling Captain Cajun Cookbook that sells for $7. The company incurs variable costs of $2 per cookbook and total fixed costs are $260,600. If the company's tax rate is 20%, how many cookbooks must be sold to generate $176,000 in net income? cookbooks
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Lucid Images Ltd manufactures premium high definition televisions. The firm’s fixed costs are$4,000,000 per year. The variable cost of each TV is $2,000, and the TVs are sold for $3,000 each. Thecompany sold 5,000 TVs during the previous year. (In the following requirements, ignore income taxes)Required:Treat each of the requirements as independent situations:a) Calculate the break-even point in units. b) What will the new break-even point be if fixed costs increase by 10 percent? c) What was the company’s net profit for the previous year? d) The sales manager believes that a reduction in the sales price to $2,500 will result in orders for1,200 more TVs each year. What will the break-even point be if the price is changed?
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