Break-even point and selling price

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Reference no: EM131850596

?(?Break-even point and selling price?)

Simple Metal? Works, Inc. will manufacture and sell 180,000 units next year. Fixed costs will total $290,000, and variable costs will be 55 percent of sales.

a. The firm wants to achieve a level of earnings before interest and taxes of $240,000. What selling price per unit is necessary to achieve this? result?

b. Set up an analytical income statement to verify your solution to part (a?).

a. What selling price per unit is necessary to achieve a level of earnings before interest and taxes of $240,000? (Round to three decimal? places.) $

b. Set up the following analytical income statement to verify your solution to part (a?).

?(Round up all items to the nearest? dollar.)

Sales

Less: Variable costs (55% of sales)

Revenues before fixed costs

Less: Fixed costs

EBIT $240,000

Reference no: EM131850596

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