Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. 1) a company has variable costs of $24.50, total f

1) A company has variable costs of $24.50, total fixed costs of $20,500,000 and plans to...

50.1K

Verified Solution

Question

Accounting

1) A company has variable costs of $24.50, total fixed costs of$20,500,000 and plans to sell its product for $38.00. In 2018 itsold 2,200,000 units of product.

Required: a) breakeven in units and dollars; b) assumemanagement wants to earn $14,000,000 in operating income, how manyunits must be sold; c) assume income tax rates are 22% of pre-taxincome and management wants to earn $16,000,000 after tax- how manyunits are required; d) for 2018 what is the margin of safety indollars and percentage; e) what is the operating leverage in 2018;f) the production manager wants to automate production and lowervariable costs by $2 per unit and spend an additional $3,500,000fixed costs per year- is this more profitable?

g) The sales manager wants to drop prices by $2 per unit andspend an added $250,000 on advertising, while volume increase by160,000 units- is this more profitable?

Answer & Explanation Solved by verified expert
3.6 Ratings (603 Votes)
    See Answer
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Finance
1.2K views

Solve these questions with formula (answer quantitatively) : a. Current earning per share = $6 Current dividend...

Accounting
1.2K views

Carsen Sorensen, controller of Thayn Company, just received the following data associated with production of a...

Basic Math
1.2K views

c(x)=74,000+60x and P(x)=300-x/30, 0

Biology
1.2K views

List some preventive and control measures for students regarding alcohol and drugs abuse.

Advance Math
1.2K views

Differential Geometry Open & Closed Sets, Continuity Prove f(t)=(x(t),y(t)) is continuous iff x(t) and y(t) are continuous

Biology
1.2K views

If employment and output are at their lowest levels an expansion in the business cycle...

Physics
1.2K views

3 k and unit vector along the normal to t Unit vector along a ray...

Calculus
1.2K views

4 Which of these numbers cannot be a probability 0 0005 a b C d...

Accounting
1.2K views

In a statement of cash flows, which of the following would be classified as an...

Accounting
1.2K views

3. (50 points) P Company purchased 75% of Prairie Co for $696,000 cash on 1/1/2019....

Accounting
1.2K views

Process and job order operations are similar in that both: (Check all that apply.)

Accounting
1.2K views

Sifton Electronics Corporation manufactures and assembles electronic motor drives for video cameras. The company assembles...