Crest Industries sells a single model of satellite radio receivers for use in the home. The radios have the following price and cost characteristics: = Sales price $80 per radio Variable costs = $32 per radio Fixed costs = $360 per month Crest Industries is subject to an income tax rate of 40 percent. How many receivers must Crest sell to earn a monthly operating profit of $90,000 after taxes?
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- price and cost characteristics:College Pizza delivers pizzas to the dormitories and apartments near a major state university. The company’s annual fixed expenses are $40,000. The sales price of a pizza is $10, and it costs the company $5 to make and deliver each pizza. (In the following requirements, ignore income taxes.)Required:1. Using the contribution-margin approach, compute the company’s break-even point in units (pizzas).2. What is the contribution-margin ratio?3. Compute the break-even sales revenue. Use the contribution-margin ratio in your calculation.4. How many pizzas must the company sell to earn a target profit of $65,000? Use the equation method.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?
- 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 per cent? c) What was the company’s net profit for the previous year? (4 marks)d) The sales manager believes that a reduction in the sales price to $2,500 will result in orders for 1,200 more TVs each year. What will the break-even point be if the price is changed?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. The company 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. (2 marks) b) What will the new break-even point be if fixed costs increase by 10 per cent? (2 marks) c) What was the company’s net profit for the previous year? (4 marks) d) The sales manager believes that a reduction in the sales price to $2,500 will result in orders for 1,200 more TVs each year. What will the break-even point be if the price is changed? (2 marks)Gardendale Associates offers landscape consultations, where they provide design advice and plans to residential customers. A single consultation is priced at $750.00. The variable costs of a consultation total $330.00 consisting mostly of labor and supplies. Annual fixed costs are $102,900. Gardendale Associates is subject to an Income tax rate of 24 percent. Required: a. What total revenue does Gardendale have to generate from selling consultations to break even? b. What total revenue does Gardendale have to generate from selling consultations to earn an annual operating profit of $106,400 after taxes? Break-even revenue Required revenue
- Hamlet House makes portable garden sheds that sell for $1,800 each. The tax rate for the company is 35 percent. Costs are as follows: Per Unit Total Direct material $800 Direct labor 90 Variable production overhead 60 Variable selling and administrative cost 50 Fixed production overhead $280,000 Fixed selling and administrative 84,000 a. If Hamlet House wants to earn an after-tax profit of $254,800, how many garden sheds must be sold? Answer garden shedsb. How many garden sheds must be sold to yield an after-tax profit of 8 percent of revenue?Note: Do not round until your final answer.Note: Round your final answer up to the nearest whole unit (for example, round 5.1 to 6 units).Answer garden shedsc. How much revenue is generated from selling units calculated in part (b)? $AnswerMarkson and Sons leases a copy machine with terms that include a fixed fee each month of $500 plus a charge for each copy made. The company uses the high-low method to analyze costs. If Markson paid $360 for 5,000 copies and $280 for 3,000 copies, how much would Markson pay if it made 7,500 copies?UrTurn sells its products at P80 per unit with the unit variable cost of P55. Its fixed cost is P81,000. How many units must be sold to achieve the following (tax rate is at 40%) Suppose that its target pre-tax income is P50,000. The company is presently selling 5,000 units. To increase sales, the management is considering an advertising program that will cost P13,000. The management estimates that this will increase sales 500 units. What should be the minimum increase in sales (in units) so that the company could really consider advertising the product.
- Golden Gate Novelties (GGN) sells souvenir key chains at the local airport. GGN charges $12.00 per chain. The variable cost for a chain, including the wholesale cost of the chain, packaging, the commission paid to the airport operator, and so on, is $10.40. The annual fixed cost for GGN is $15,000. Required: a. How many cases must Golden Gate Novelties sell every year to break even? Note: Do not round intermediate calculations. b. The owner of GGN believes that the company can sell 12,500 chains a year. What is the margin of safety in terms of the number of chains? a. Break-even point b. Margin of safety chains chainsam.105.Hawk Homes, Ic., makes one type of birdhouse that it sells for $30.00 each. Its variable cost is $13.50 per house, and its fixed costs total $14,239.50 per year. Hawk currently has the capacity to produce up to 2,800 birdhouses per year, so its relevant range is 0 to 2,800 houses. Required: 1. Prepare a contribution margin income statement for Hawk assuming it sells 1,110 birdhouses this year. 2. Without ancaleuletione, detonmine llawks total contribution morgin if the company breake 3. Сн 4. Calculate Hawk's break-even point in number of units and in sales revenue. 5. Suppose Hawk wants to earn $21,000 this year. Determine how many birdhouses it must sell to generate this amount of profit. O margm per umt Omarginatio. Answer is not complete. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Required 5 Prepare a contribution margin income statement for Hawk assuming it sells 1,110 birdhouses this year. (Enter your answers…
