Acme inc sells its product for 45 the variable cost per

Reference no: EM13601073

Cost-volume-profit analysis is used to analyze the relationship between revenues, variable costs, fixed costs, profits and units produced.

For each of the following situations, calculate the missing items.

(a) Acme, Inc. sells its product for $45. The variable cost per unit is $24, and fixed costs are $1,672,500. What profit will Acme make if 225,000 units are produced and sold?

(b) Beta Co, can sell 140,000 units in one year. Variable costs are $130 per unit, and fixed costs are $4,040,000. How much should Beta sell its product for per unit if the company wants to make a pretax profit of $2,260,000?

(c) Capitol Enterprises sells $85,400 units in one year. The product has a contribution margin of $44, and fixed costs are $1,907,600. What is Capitol enterprises' pretax profit?

(d) Denson, Inc. sells its product for $135. The product has a variable cost of $105 and fixed costs of $36,000,000. How many units should the company sell if it wants to earn pretax profits of $27,000,000?

(e) Edgar Co. has a tax rate of 35 percent. The company sells a product with an $18.50 contribution margin; fixed costs of $9,000,000 are incurred by the company annually. How many units should the company sell if it wants to earn after-tax profits of $3,325,000?

Reference no: EM13601073

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