Reference no: EM132760269
A firm has the following data for a given month. Sales: 3,000 units at USD 80.00/unit
Less:
Cost of Goods Sold Variable Production
Cost: USD 180,000.00
Fixed Production Cost:
USD 19,800.00
Gross Margin: USD 40,200.00
Selling and Administrative Expenses
Variable Selling Cost: USD 21,000.00
Fixed Selling Expenses: USD 7,500.00
Net Income Before Taxes: USD 11,700.00
a. Find the firm's breakeven output.
b. If it wishes to have a monthly net income before taxes of USD 20,000.00 and its cost structure remains as above, what quantity of output will it need to sell?
c. If its variable production costs increase by USD 6.00 per unit, what will be its breakeven output?
d. After the increase in costs in (c), what output will it need to sell if it wishes to have the USD 20,000.00 monthly pretax profit stated earlier?
e. Given the variable production cost increase but no change in fixed costs, what will be the firm's monthly profit if it sells 5,500 units of output per month?
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