Computing profit margin on sales

Assignment Help Accounting Basics

Reference no: EM13144325

Airflow Company sells a product in a competitive marketplace. Market analysis indicates that their product would probably sell at $28 per unit. Airflow management desires a profit equal to a 20% rate of return on invested assets of $1,400,000. They anticipate selling 70,000 units. Their current full cost per unit for the product is $25 per unit.

If the company can not cut costs any lower than they already are what would the profit margin on sales be if they meet the market selling price

Reference no: EM13144325

Questions Cloud

What is the difference between volume-based cost drivers : What is the difference between volume-based cost drivers and activity-based cost drivers? Why do activity-based cost drivers provide more accurate allocations of overhead in an automated manufacturing environment? Briefly describe the activity-ba..

What is the net amount of property-plant and equipment : What is the net amount of property, plant, and equipment that will appear on the balance sheet?

How much could normal sales drop before all profit : Compute the effect on income if Cornish accepts the special order. If Cornish accepts the special order, how much could normal sales drop before all of the differential profits disappear?

At what price would gorga be indifferent to roseland offer : By how much would Gorga's profits change if 15,000 of part QT34 are purchased from Roseland? At what price would Gorga be indifferent to Roseland's offer?

Computing profit margin on sales : If the company can not cut costs any lower than they already are what would the profit margin on sales be if they meet the market selling price

What was the firms budgeted payables balance : If purchases for April, May, and June were $200,000, $160,000, and $250,000, respectively, what was the firm's budgeted payables balance on June 30?

Prepare the journal entries necessary to restore : The company collects $5,000 subsequently on a specific account that had previously been determined to be uncollectible in the question above. Prepare the journal entry(ies) necessary to restore the account and record the cash collection

Change anything in your own : How might this same theory of motivation help you to understand your own school and work related behavior? Will you change anything in your own life as a result of what you have studied in this scenario?

What are the tax law requirements for structuring : What are the tax law requirements for structuring the business as a partnership or an S corporation? Which would you recommend and why?

User Account

All Pages