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Question - Doop Snog produces cookbooks. Each cookbook requires $1 in Direct Materials and $5 of Direct Labor. Fixed costs (including Research and Development) total $8,400 per month. Each cookbook sells for $37.00.
a. If fixed costs are increased by $8,000, How many cookbooks does Doop need to produce each month to break even?
b. Again, if fixed costs are increased by $8,000, how many cookbooks does Doop need to produce each month to achieve a before-tax profit of $96,000?
c. How many cookbooks does Doop need to produce each month to achieve an after-tax profit of $96,000 if the tax rate is 40%?
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