What is the effect on breakeven

Assignment Help Operation Management

Reference no: EM132298280

A certain company sells its only product for $12 per unit. The variable costs to produce the product are $7 per unit and it costs approximately $1 per unit for selling and administrative costs. The fixed costs of production are $400,000 per period and the fixed selling and administrative costs are $200,000 per year. The company is subject to a 30 percent tax rate. Answer the following questions. a. What is the breakeven point in units? b. What is the breakeven point in dollars? c. How many units must be sold to earn a profit of $70,000 before tax? d. How many units must be sold to earn a profit of $70,000 after tax? e. If the variable costs increase 10 percent, what increase is necessary in selling price to maintain the same breakeven point in units? f. If the fixed costs increase, what is the effect on breakeven? On contribution margin per unit? g. If the tax rate increases, what is the effect on breakeven? On contribution margin per unit?

Reference no: EM132298280

Questions Cloud

Employee benefits are seen as entitlement by many employees : Provide your reaction to the statement: "Employee benefits are seen as an entitlement by many employees."

What is the average selling price per steering wheel : What is the average selling price per steering wheel? What is the average variable cost per unit sold?

How natural biases in communication can play havoc : Explain how natural biases in communication can play havoc with effective teamwork and what you, as a leader,

Improve customer service with data mining : How did Infinity P&C improve customer service with data mining?

What is the effect on breakeven : On contribution margin per unit? If the tax rate increases, what is the effect on breakeven?

Applications of information systems : How would be some examples to illustrate how the business applications of information systems can support a firm's business processes

Universal definition of homeland security : Explain why it is important to have definitions for strategies and funding (involving Department of Homeland Security and Department of Defense).

How to appraise an individual and an organizational : How to appraise an individual and an organizational consequences of the use of information technology, and recognize potential security breaches and computer

Core roles and responsibilities of strategic managers : What are the three core roles and responsibilities of strategic managers?

User Account

All Pages