What is the unit variable cost what is the unit variable

Reference no: EM13588859

Prachi Company produces and sells disposable foil baking pans to retailers for $2.45 per pan. The variable costs per pan are as follows:

DM $0.27

DL 0.58

Variable overhead 0.63

Selling 0.17

Fixed manufacturing costs total $131,650 per year. Administrative costs (all fixed) total $18,350.

Required:

1.Compute the number of pans that must be sold for Prachi to break even.

2.How many pans must be sold for Prachi to earn a before-tax profit of $12,600?

3.What is the unit variable cost? What is the unit variable manufacturing cost? Which is used in c-v-p analysis and why?

4.Assuming a tax rate of 40%, how many pans must be sold to earn an after-tax profit of $25,200?

Reference no: EM13588859

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