he following independent situations relate to questions 1.2 and 1.3: 1.2. Novana company has a break-even point of 16 000 units. At break-even point, variable cost is N$25 600 and fixed cost is N$6 400. If one unit over breakeven is sold, what would be the company's total sales. 1.3 Motto company's product sells for N$20 per unit. Annual fixed costs are N$56 000 and contribution margin ratio is 40% of selling price. 1.3.1 How many units would Motto company needs to sell to earn a 15% profit before tax on sales. 1.3.2 Using the units you computed in (1.3.1), calculate the expected profit before tax on sales.
he following independent situations relate to questions 1.2 and 1.3: 1.2. Novana company has a break-even point of 16 000 units. At break-even point, variable cost is N$25 600 and fixed cost is N$6 400. If one unit over breakeven is sold, what would be the company's total sales. 1.3 Motto company's product sells for N$20 per unit. Annual fixed costs are N$56 000 and contribution margin ratio is 40% of selling price. 1.3.1 How many units would Motto company needs to sell to earn a 15% profit before tax on sales. 1.3.2 Using the units you computed in (1.3.1), calculate the expected profit before tax on sales.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
The following independent situations relate to questions 1.2 and 1.3:
1.2. Novana company has a break-even point of 16 000 units. At break-even point,
variable cost is N$25 600 and fixed cost is N$6 400. If one unit over breakeven is
sold, what would be the company's total sales.
1.3 Motto company's product sells for N$20 per unit. Annual fixed costs are N$56 000
and contribution margin ratio is 40% of selling price.
1.3.1 How many units would Motto company needs to sell to earn a 15% profit before
tax on sales.
1.3.2 Using the units you computed in (1.3.1), calculate the expected profit before
tax on sales.
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