What sales price would have to be charged to earn

Assignment Help Managerial Accounting
Reference no: EM132667666

Problem 1: Newton Company currently produces and sells 4000 units of a product that has a contribution margin of $6 per unit. The company sells the product for a sales price of $20 per unit. Fixed costs are $18,000. The company is considering investing in new technology that would decrease the variable cost per unit to $8 per unit and double total fixed costs. The company expects the new technology to increase production and sales to 9000 units of product. What sales price would have to be charged to earn a $90,000 target profit assuming the investment in technology is made?

Option 1: $22

Option 2: $8

Option 3: $20

Option 4: $18

Reference no: EM132667666

Questions Cloud

Discuss alternative methods the chinese authority : Discuss alternative methods the Chinese authority might use to improve that Australian wines have been dumped in China.
What impact does have on walmart financial statements : Walmart's 2020, When a customer purchases a gift card from Walmart, what impact does this have on Walmart's financial statements?
What is the amount of accumulated depreciation expense : For tax purposes, what is the amount of accumulated depreciation expense for the equipment as of December 31, year 10
Draw a money-interest rate and exchange rate diagram : Draw a money-interest rate and exchange rate diagram to show how the Bank of Japan would have changed its money supply to change its exchange rate
What sales price would have to be charged to earn : Newton Company, What sales price would have to be charged to earn a $90,000 target profit assuming the investment in technology is made?
How do leaders deal with what may be a skills gap : Impact on organisational processes, outcomes and people, means that many of these behavioral traits will need to be evidenced in practice
Highest cost firms minimum average cost of production : Assume the market for broomstick production in the Wizarding World is perfectly competitive. If demand for broomsticks were to double causing higher costs firms
Compute Janice Morgan Federal income tax payable : Compute Janice Morgan's 2018 Federal income tax payable (or refund due). If you use tax forms for your computations, you will need Forms 1040
What is the effect of an increase in marginal cost : What is the effect of an increase in marginal cost on the monopolist's price? What is the effect on the monopolist's revenue?

Reviews

Write a Review

Managerial Accounting Questions & Answers

  Journal entry to record the allocation

Manufacturing overhead for the month was overapplied by $5,000. The company allocates any underapplied or overapplied overhead among work in process.

  What sales quantity per year will the investment break even

The tax rate is 22 percent and the discount rate is 11 percent. At what sales quantity per year will the investment break even on a financial basis?

  Prepare a statement of relevant cash flows for the project

Prepare a statement of relevant cash flows for this project, explaining clearly the reasoning behind your decisions to exclude any of the above expenditures.

  Why does the fasb recommend the direct method

Why does the FASB recommend the direct method over the indirect method?

  Compute the number of units that awad company must sell

Compute the number of units that Awad Company must sell To achieve its after-tax profit objective and In order to break even.

  What would be total appraisal cost appearing on wuality cost

Eagle company's quality cost reort is to be based on the data shown. What would be the total appraisal cost appearing on the wuality cost report?

  Annual financial statements from her accountant

1.Your friend, Diana Wood, recently completed the second year of her business and just received annual financial statements from her accountant.

  How much would bundy have charged the customer

Selling prices by adding a markup percentage of 50% of its total job cost, then how much would Bundy have charged this customer for her car's repairs?

  What is the amount of sales tax liability as of december

What is the amount of sales tax liability as of December 31, Year 1? What was the total amount of sales tax collected in Year 1?

  Calculate debt equity ratio and capital employed ratio

Calculate Debt Equity Ratio, Proprietory Ratio, and Debt to Capital Employed Ratio and also comment on each ratio. Non-current Liabilities Long-term borrowings

  What are some day to day items you have encountered

On the cash flow side, operating cash flow is also one of the most important indicators - What are some day to day items you have encountered

  What measures of performance should the company

Identify three of the most successful companies or organizations today, in your opinion. Explain why they are so successful

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd