Prostuff Company produces catchers mitts. Currently, Prostuff charges a price of $35 per mitt. Variable costs are

Question:

Prostuff Company produces catchers’ mitts. Currently, Prostuff charges a price of $35 per mitt. Variable costs are $23.10 per mitt, and fixed costs are $23,800. The tax rate is 40 percent. Last year, 17,800 mitts were sold.

Required:

1. What is Prostuff’s net income for last year?

2. What is Prostuff’s break-even revenue?

3. Suppose Prostuff wants to earn before-tax operating income of $214,200. How many units must be sold?

4. Suppose Prostuff wants to earn after-tax net income of $214,200. How many units must be sold?

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Cost Management Accounting and Control

ISBN: 978-0324559675

6th Edition

Authors: Don R. Hansen, Maryanne M. Mowen, Liming Guan

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Question Posted: Mar 29, 2012 05:27 AM

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Prostuff Company produces catchers mitts. Currently, Prostuff charges a price of $35 per mitt. Variable costs are

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1 Sales 17800 X 35 623000 Variable expenses 17800 X 2310 411180 Cont...View the full answer

Cost Management Accounting and Control

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