Provide correct answer general accounting 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?

Determine the required pre-tax operating profitCrest's desired after-tax operating profit is…

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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price and cost characteristics:
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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
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.
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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?
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)
Great Tasting Soft Drinks manufactures and sells a brand of soft drinks that is quite popular in selected areas. The selling price per bottle is $15 and variable expenses $12. The fixed expenses for the period is $200,000. How many bottles must the company sell if it wishes to make a profit before tax of $250,000?
The Tick Tock Clock Company sells a particular clock for $75. The variable costs are $15 per clock and the breakeven point is 230 clocks. The company expects to sell 280 clocks this year. If the company actually sells 355 clocks, what effect would the sale of additional 75 clocks have on operating income? Explain your answer The sale of an additional 75 dlocks would aller an. operating income by the amount of The total effect would amount to 4
Hammerhead Charters runs fishing trips out of the local port. Hammerhead charges $90 per trip for a half-day trip. Variable costs for Hammerhead total $40 per trip and the fixed costs are $18,000 per month. Hammerhead is subject to an income tax rate of 25 percent. Required: How many trips must Hammerhead sell to break even? How many trips must Hammerhead sell to earn a monthly operating profit of $15,000 after taxes?
Tim's Bicycle Shop sells 21-speed bicycles. For purposes of a cost-volume-profit analysis, the shop owner has divided sales into two categories, as follows: product type high quality medium quality price invoice cost 840 620 sales commission sales price 1850 920 100 40 Three-quarters of the shop's sales are medium-quality bikes. The shop's annual fixed expenses are $270,400. (In the following requirements, ignore income taxes.) a. What is the shop's break-even sales volume in dollars? Assume a constant sales mix. b. How many bicycles of each type must be sold to earn a target net income of $126,750? Assume a constant sales mix.

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