Firm M expects to earn $210,000 next year after taxes. Sales will be $4 million. This firm makes combined bookshelf and desk unit for college students. This units sell for $200 each and have a variable cost of $150 per unit. This firm pays 30 percent tax rate on its earnings. Based on the information provided, estimate the firm’s fixed costs expected next year and estimate the firm’s break-even point in units and dollars.
Firm M expects to earn $210,000 next year after taxes. Sales will be $4 million. This firm makes combined bookshelf and desk unit for college students. This units sell for $200 each and have a variable cost of $150 per unit. This firm pays 30 percent tax rate on its earnings. Based on the information provided, estimate the firm’s fixed costs expected next year and estimate the firm’s break-even point in units and dollars.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Firm M expects to earn $210,000 next year after taxes. Sales will be $4 million. This firm makes combined bookshelf and desk unit for college students. This units sell for $200 each and have a variable cost of $150 per unit. This firm pays 30 percent tax rate on its earnings. Based on the information provided, estimate the firm’s fixed costs expected next year and estimate the firm’s break-even point in units and dollars.
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