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  3. 4. hunter & sons sells a single model of meat

4. Hunter & Sons sells a single model of meat smoker for use in the...

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Accounting

4. Hunter & Sons sells a single model of meat smoker for use in the home. The smokers have the following price and cost characteristics:

Sales price $ 75 per smoker
Variable costs 39 per smoker
Fixed costs 288,000 per month

Hunter & Sons is subject to an income tax rate of 40 percent.

Required:

a. How many smokers must Hunter & Sons sell every month to break even?

b. How many smokers must Hunter & Sons sell to earn a monthly operating profit of $45,360 after taxes?

5.

Rio Coffee Shoppe sells two coffee drinks, a regular coffee and a latte. The two drinks have the following prices and cost characteristics:

Regular Coffee Latte
Sales price (per cup) $ 1.60 $ 2.50
Variable costs (per cup) 0.70 1.10

The monthly fixed costs at Rio are $7,300. Based on experience, the manager at Rio knows that the store sells 80 percent regular coffee and 20 percent lattes.

Required:

How many cups of regular coffee and lattes must Rio sell every month to break even?

Sales price (per cup) $ 1.60 $ 2.50
Variable costs (per cup) 0.70 1.10

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