Ionic Charge is a newly organized manufacturing company that plans to manufacture 60,000 units per year of a new prodect. The following estimates have been made of the company's costs and expenses other than income taxes Fixed Variable per unit Manufacturing costs Direct Materials $25 Direct Labor $15 Manufacturing overhead $500,000 8 Period Costs Selling expenses 2 Admin expenses $300,000 Totals $800,000 $50 B. At the unit sales price computed in part A ($75), how many units must the company produce and sell to break even. (Assume all units produced are sold) c. What will be the margin of safety in dollars if the comapny produces and sells 60,000 units at the sales price of $75. D. Assume that the marketing manager thinks th,eprice of this, product must be no higher than $60 to ensure market penetration. Will setting the sales price at $60 enable the company to break even given the plans to manufacture and sell 60,000?
Ionic Charge is a newly organized manufacturing company that plans to manufacture 60,000 units per year of a new prodect. The following estimates have been made of the company's costs and expenses other than income taxes Fixed Variable per unit Manufacturing costs Direct Materials $25 Direct Labor $15 Manufacturing overhead $500,000 8 Period Costs Selling expenses 2 Admin expenses $300,000 Totals $800,000 $50 B. At the unit sales price computed in part A ($75), how many units must the company produce and sell to break even. (Assume all units produced are sold) c. What will be the margin of safety in dollars if the comapny produces and sells 60,000 units at the sales price of $75. D. Assume that the marketing manager thinks th,eprice of this, product must be no higher than $60 to ensure market penetration. Will setting the sales price at $60 enable the company to break even given the plans to manufacture and sell 60,000?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Ionic Charge is a newly organized manufacturing company that plans to manufacture 60,000 units per year of a new prodect. The following estimates have been made of the company's costs and expenses other than income taxes
| Fixed | Variable per unit | |
| Direct Materials | $25 | |
| Direct Labor | $15 | |
| Manufacturing |
$500,000 | 8 |
|
Period Costs |
||
| Selling expenses |
2 |
|
| Admin expenses | $300,000 | |
| Totals | $800,000 | $50 |
B. At the unit sales price computed in part A ($75), how many units must the company produce and sell to break even. (Assume all units produced are sold)
c. What will be the margin of safety in dollars if the comapny produces and sells 60,000 units at the sales price of $75.
D. Assume that the marketing manager thinks th,eprice of this, product must be no higher than $60 to ensure market penetration. Will setting the sales price at $60 enable the company to break even given the plans to manufacture and sell 60,000?
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