Hamlet House makes portable garden sheds that sell for $1,800 each. 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 $200,000 Fixed selling and administrative 60,000 a. How many garden sheds must the company sell to break even? b. If Hamlet House’s management wants to earn a pre-tax profit of $200,000, how many garden sheds must be sold? c. If Hamlet House’s management wants to earn a pre-tax profit of $280,000, how many garden sheds must be sold?
Hamlet House makes portable garden sheds that sell for $1,800 each. 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 $200,000 Fixed selling and administrative 60,000 a. How many garden sheds must the company sell to break even? b. If Hamlet House’s management wants to earn a pre-tax profit of $200,000, how many garden sheds must be sold? c. If Hamlet House’s management wants to earn a pre-tax profit of $280,000, how many garden sheds must be sold?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Hamlet House makes portable garden sheds that sell for $1,800 each. Costs are as follows:
| Per Unit | Total | |
|---|---|---|
| Direct material | $800 | |
| Direct labor | 90 | |
| Variable production |
60 | |
| Variable selling and administrative cost | 50 | |
| Fixed production overhead | $200,000 | |
| Fixed selling and administrative | 60,000 |
a. How many garden sheds must the company sell to break even?
b. If Hamlet House’s management wants to earn a pre-tax profit of $200,000, how many garden sheds must be sold? c. If Hamlet House’s management wants to earn a pre-tax profit of $280,000, how many garden sheds must be sold?
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