Brant Consulting designs costing and transfer pricing systems for its clients. Here is a summary of volume,
Question:
Brant Consulting designs costing and transfer pricing systems for its clients. Here is a summary of volume, revenue, and cost expectations for the upcoming year:
Required
(a) Assuming a constant sales mix, how many units of each product must Brant Consulting sell to breakeven?
(b) Assuming a constant sales mix, how many units of each product must Brant Consulting sell to earn a pretax profit of $86,000?
Transcribed Image Text:
ITEM Revenue.... Variable cost. Contribution margin.... Fixed cost..... Profit.... COSTING PROJECTS PER UNIT 50 JOBS $10,000 $500,000 4,500 225,000 $ 5,500 $275,000 TRANSFER PRICING PROJECTS PER UNIT 75 JOBS $15,000 $1,125,000 11,500 862,500 $ 3,500 $ 262,500 FIRM TOTAL $1,625,000 1,087,500 $ 537,500 473,000 $ 64,500
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To answer this question we need to use the breakeven and profit formulas The breakeven point is the level of sales where total revenue equals total co...View the full answer
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Management Accounting Information For Decision Making
ISBN: 9781618533517
7th Edition
Authors: Anthony A. Atkinson
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