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How many units must be sold to earn a before-tax profit

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Reference no: EM131062667

Problem

Tiger Golf Accessories sells golf shoes, gloves, and a laser-guided range finder that measures distance. Shown below are unit cost and sales data.

Pairs of Shoes

Pairs of Gloves

Range-Finder

Unit Sales Price

$100

$25

$300

Unit variable cost

50

15

200

Unit contribution margin

$50

$10

$100

Sales mix

30%

60%

10%

Fixed casts are $ 620,000

Instructions:

1. Compute the break-even point in units for the company

Weighted-average unit contribution margin

Break-even point in units

2. Determine the number of product units to be sold and sales dollars at the break-even point

Units

Sales Dollars

Shoes

Gloves

Range finders

 

3. Determine how many units must be sold to earn a before-tax profit of $62.000

4. Determine how many units of each product must be sold to earn an after-tax profit of $65,100 if the company's tax rate is 30%

Units

Shoes

Gloves

Range finders

 

Reference no: EM131062667

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