Determine the percent of plant capacity

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Reference no: EM1352225

A manufacturer of electronic products provides the following information relating to revenues, costs and plant capacity. The purpose is to find the answers to the questions that are of primary concern to the company. The data are:

The capacity of the plant (Plant Capacity) is 55,000 units variable cost per unit (Variable Cost) is $ 18 The benefit obtained in each unit sold (Unit Contribution Margin) is $ 22 The total fixed costs (Total Fixed Cost) are $550,000 Tax rate (Tax Rate) 15% The expected gain (Desired Profit) is $85,000

8. What percent of plant capacity will be used by the company, if you want to cover their sales with total costs, payment of taxes and the expected gain?

9. What would be the selling price of the product for the plant was in its break even point, if the fixed cost was $ 500,000; the variable cost was $ 50, the maximum amount to sell out 40,000?

10. On the break even point the price of question # 9, if the company wanted to make a profit of 30%, what would be the selling price of the product?

Please write the formulas used and the relevant computer.

Reference no: EM1352225

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