Solution-What unit sales are necessary to achieve after-tax

What unit sales are necessary to achieve after-tax profit

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Reference no: EM132541738

The following data refer to a single product, the TECHWHIZ, made by the Markdata Computer Company:

Sales price = $5,519

Direct materials cost (including purchased components) = $885

Direct labor cost = $230

Facilities costs (for a highly automated plant; mainly includes rent, insurance, taxes, and depreciation) = $2,321,700 per year

Required:

Question 1. What is the contribution margin per unit?

Question 2. What is the breakeven point, in units and in dollars? (Do not round intermediate calculations. Round up your answer to the next whole unit.)

Question 3. What is the required level of sales (in units) if the company plans to increase facilities costs by 4% (to improve product quality and appearance) and has a desired before-tax profit (πB) of $200,000? (Do not round intermediate calculations. Round up your answer to the next whole unit.)

Question 4. If the company's income tax rate is 24%, what unit sales are necessary to achieve an after-tax profit (πA) of $170,000? (Do not round intermediate calculations. Round up your answer to the next whole unit.)

Reference no: EM132541738

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What unit sales are necessary to achieve after-tax profit

Reference no: EM132541738

Reference no: EM132541738

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