Question

Moving Forward Company, a producer of cardboard boxes, has the following information: Income tax rate 40...

Moving Forward Company, a producer of cardboard boxes, has the following information: Income tax rate 40 percent Selling price per unit $2.75 DM per unit $0.75 DL per unit $0.25 Variable MOH per unit $0.75 Total fixed costs $37,500 (round units up to next whole number and dollars to nearest whole dollar (no decimal places0)

a)  Calculate break even in units (round units up to next whole number)

b) Calculate break even in dollars.

c) How many units must be sold to obtain a targeted before-tax income of $6,000?

d)How many units must be sold to obtain a targeted after-tax income of $6,000?

Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

a.

Break even points in units = Fixed costs / Contribution margin per unit

Break even points in units = $37,500 / $1 ($2.75-0.75-0.25-0.75) = 37,500 units

b.

Break even in dollars = 37,500 * $2.75 = $103,125

c.

Desired sales units = Fixed costs + Desired profit / Contribution margin per unit

Desired sales units = $37,500 + 6,000 / $1 = 43,500 units

d.

Desired sales units = Fixed costs + Desired profit / Contribution margin per unit

Desired sales units = $37,500 + 10,000($6,000/60%) / $1 = 47,500 units

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Christina Company reports the contribution margin income statement for 2020 below. Using this information, compute Christina...
Christina Company reports the contribution margin income statement for 2020 below. Using this information, compute Christina Company's 1) break-even point in units, 2) break-even point in sales dollars, 3) unit sales to achieve target pretax income, and 4) dollar sales to achieve target pretax income. Units $ per unit Total Sales 1,700 $200 $340,000 Variable costs 1,700 130 221,000 Contribution margin 119,000 Fixed costs 84,000 Pretax income $35,000 I need the formulas to plug into excel 1) Compute the break-even...
Company expects to produce and sell12,000 units for $80 DM costs are $8 DL is $40...
Company expects to produce and sell12,000 units for $80 DM costs are $8 DL is $40 MOH is $12 per unit                                                     Beginning inventory                                Target Ending inventory Finished goods inventory           800 units                                           1000 units On the 2020 budgeted income statement, what amount will be reported for sales? (4 points) A. $960,000 B. $860,000 C. $80,000 D. $24,000 Company expects to produce and sell12,000 units for $80 DM costs are $8 DL is $40 MOH is $12 per unit                                                     Beginning inventory                                Target Ending inventory Finished...
1. CVP Analysis; Break-even point, margin of safety: Davies’ Violins, Ltd, produces and sells a single...
1. CVP Analysis; Break-even point, margin of safety: Davies’ Violins, Ltd, produces and sells a single product, violins, whose selling price is $175.00 per unit and whose variable cost is $62.00 per unit. The company's fixed expense is $15,430 per month. The current volume of sales is 200 violins per month. Determine the monthly total contribution margin at the current volume of sales. Determine the monthly net income (loss) at the current volume of sales. Determine the monthly break-even point:...
Medoc Company provides the following information about its single product. Targeted operating income ​$53,290 Selling price...
Medoc Company provides the following information about its single product. Targeted operating income ​$53,290 Selling price per unit ​$6.85 Variable cost per unit ​$4.00 Total fixed cost ​$95,190 How many units must be sold to earn the targeted operating​ income?
Royale Aluminum desires an after-tax income of $500,000. It has fixed costs of $2,500,000, a unit...
Royale Aluminum desires an after-tax income of $500,000. It has fixed costs of $2,500,000, a unit sales price of $300, and unit variable costs of $150, and is in the 40% tax bracket. Required: 1.) What is the break-even point in units? 2.) What is the break-even point in dollars? 3.) How many units needed to earn $500,000 net operating income when no income tax existed? 4.) What amount of pre-tax income is needed to earn an after-tax income of...
SALES MIX BREAKEVEN Wich Brothers sells two kinds of sandwiches – meat and veggie.  Information on sales...
SALES MIX BREAKEVEN Wich Brothers sells two kinds of sandwiches – meat and veggie.  Information on sales for July follow: Meat Veggie Totals Number of sandwiches 9,000 6,000 15,000 Sales $72,000 $60,000 $132,000 Variable costs 27,000 15,000 42,000 Contribution Margin 45,000 45,000 90,000 Fixed costs 24,000 30,000 54,000 Operating income $21,000 $15,000 $36,000 The sales mix is expected to remain steady. 10.  Determine the number of units and sales revenue for each product at the breakeven point.  (Round up to the nearest unit...
Northwood Company manufactures basketballs. The company has a ball that sells for $25. At present, the...
Northwood Company manufactures basketballs. The company has a ball that sells for $25. At present, the ball is manufactured in a small plant that relies heavily on direct labor workers. Thus, variable expenses are high, totaling $15.00 per ball, of which 60% is direct labor cost. Last year, the company sold 37,500 of these balls, with the following results: Sales (37,500 balls) $ 1,125,000 Variable expenses 675,000 Contribution margin 450,000 Fixed expenses 240,000 Net operating income $ 210,000 Required: 1....
Zaldor Corporation sells a specialized speaker and has the following information for the current year: Total...
Zaldor Corporation sells a specialized speaker and has the following information for the current year: Total Per Unit Percent of Sales Sales (20,000 units) 1,200,000 60 100% Variable expenses 800,000 40 ? % Contribution margin 400,000 20 ? % Fixed expenses 250,000 Net operating income 150,000 Required: A. Calculate the variable expense ratio B. Calculate the contribution margin ratio C. Calculate break-even sales in units D. Calculate break-even sales in dollars E. How many units must be sold to make...
Gannon Company sells a single product for $15 per unit. Variable costs are $10 per unit...
Gannon Company sells a single product for $15 per unit. Variable costs are $10 per unit and fixed costs are $180,000 at an operating level of 16,000 to 30,000 units. a. What is Gannon Company's break-even point in units?answer b. How many units must be sold to earn $20,000 before income tax? answer c. How many units must be sold to earn $30,000 after income tax, assuming a 40% tax rate? Answer
Cost-Volume Profit Analysis Hailstorm Company sells a single product for $22 per unit. Variable costs are...
Cost-Volume Profit Analysis Hailstorm Company sells a single product for $22 per unit. Variable costs are $14 per unit and fixed costs are $65,000 at an operating level of 7,000 to 12,000 units. a. What is Hailstorm Company's break-even point in units? ?units b. How many units must be sold to earn $12,000 before income tax? ?r units c. How many units must be sold to earn $13,000 after income tax, assuming a 35% tax rate? ? units
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT