# Question: Cost volume pro t analysis is used to analyze the relationship between revenues

Cost-volume-proﬁt analysis is used to analyze the relationship between revenues, variable costs, ﬁxed costs, proﬁts, and units produced.
Required:
For each of the following situations, calculate the missing items.
(a) Acme, Inc. sells its product for \$45. The variable cost per unit is \$24, and ﬁxed costs are \$1,672,500. What proﬁt will Acme make if 225,000 units are produced and sold?
(b) Beta Co. can sell 140,000 units in one year. Variable costs are \$130 per unit, and ﬁxed costs are \$4,040,000. How much should Beta sell its product for per unit if the company wants to make a pretax proﬁt of \$2,260,000?
(c) Capitol Enterprises sells 85,400 units in one year. The product has a contribution margin of \$44, and ﬁxed costs are \$1,907,600. What is Capitol Enterprises’ pretax proﬁt?
(d) Denson, Inc. sells its product for \$135. The product has a variable cost of \$105 and ﬁxed costs of \$36,000,000. How many units should the company sell if it wants to earn pretax proﬁts of \$27,000,000?
(e) Edgar Co. has a tax rate of 35 percent. The company sells a product with an \$18.50 contribution margin; ﬁxed costs of \$9,000,000 are incurred by the company annually. How many units should the company sell if it wants to earn after-tax proﬁts of \$3,325,000?

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