Super Sales Company is the exclusive distributor for a high-quality knapsack. The product sells for $100 per unit and has a CM rat 40%. The company's fixed expenses are $459,000 per year. The company plans to sell 12.000 knapsacks this year. Required: 1. What are the variable expenses per unit? Variable expenses per unit 2. Use the equation method for the following: a. What is the break-even point in units and in sales dollars? Break-even point in units Break-even point in sales dollars b. What sales level in units and in sales dollars is required to earn an annual profit of $99.000? Sales in units Sales in dollars c. What sales level in units is required to earn an annual after-tax profit of $99.000 if the tax rate is 25%2
Super Sales Company is the exclusive distributor for a high-quality knapsack. The product sells for $100 per unit and has a CM rat 40%. The company's fixed expenses are $459,000 per year. The company plans to sell 12.000 knapsacks this year. Required: 1. What are the variable expenses per unit? Variable expenses per unit 2. Use the equation method for the following: a. What is the break-even point in units and in sales dollars? Break-even point in units Break-even point in sales dollars b. What sales level in units and in sales dollars is required to earn an annual profit of $99.000? Sales in units Sales in dollars c. What sales level in units is required to earn an annual after-tax profit of $99.000 if the tax rate is 25%2
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
![Super Sales Company is the exclusive distributor for a high-quality knapsack. The product sells for $100 per unit and has a CM ratio of
40%. The company's fixed expenses are $459,000 per year. The company plans to sell 12,000 knapsacks this year.
Required:
1. What are the variable expenses per unit?
Variable expenses per unit
2. Use the equation method for the following:
a. What is the break-even point in units and in sales dollars?
Break-even point in units
Break-even point in sales dollars
b. What sales level in units and in sales dollars is required to earn an annual profit of $99,000?
Sales in units
Sales in dollars
c. What sales level in units is required to earn an annual after-tax profit of $99,000 if the tax rate is 25%?
Sales in units
d. Assume that through negotiation with the manufacturer, Super Sales Company is able to reduce its variable expenses by $5 per
unit. What is the company's new break-even point in units and in sales dollars? (Do not round intermediate calculations. Round your
final answers to the nearest whole number)
New break-even point in units
New break-even point in sales dollars](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F5efabccc-54c8-42ff-a6c8-6c723cc74fb2%2F28b22680-1872-41f0-939b-ac7a52a5bfcb%2Fx5apnv_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Super Sales Company is the exclusive distributor for a high-quality knapsack. The product sells for $100 per unit and has a CM ratio of
40%. The company's fixed expenses are $459,000 per year. The company plans to sell 12,000 knapsacks this year.
Required:
1. What are the variable expenses per unit?
Variable expenses per unit
2. Use the equation method for the following:
a. What is the break-even point in units and in sales dollars?
Break-even point in units
Break-even point in sales dollars
b. What sales level in units and in sales dollars is required to earn an annual profit of $99,000?
Sales in units
Sales in dollars
c. What sales level in units is required to earn an annual after-tax profit of $99,000 if the tax rate is 25%?
Sales in units
d. Assume that through negotiation with the manufacturer, Super Sales Company is able to reduce its variable expenses by $5 per
unit. What is the company's new break-even point in units and in sales dollars? (Do not round intermediate calculations. Round your
final answers to the nearest whole number)
New break-even point in units
New break-even point in sales dollars
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