Company planned normal operation level $(10,000$ h$)$ sales revenues and costs for the $3$rd quarter of $2023$ are as follows:

Total $|$ Product $1|$ Product $2$

Sales Revenues $|400,000|160,000|240,000$

Direct Materials $|110,000|40,000|70,000$

Direct Labor $|80,000|30,000|50,000$

Variable Overheads $|120,000|48,000|72,000$

Fixed Direct Costs $|3,500|2,000|1,500$

Contribution Margin $|86,500|40,000|46,500$

Fixed Overheads:

Depreciation $|25,000$

Other $|30,000$

Profit Before Taxes $|31,500$

Contribution margin $\%$:

Product $1$: $26\mathrm{.}25\%42000/160000$

Product $2$: $20\mathrm{.}00\%48000/240000$

Company: $22\mathrm{.}50\%90000/400000$

Break$-$even point:

Product $1$: $2000/0\mathrm{.}2625=7619\mathrm{.}05$

Product $2$: $1500/0\mathrm{.}20=7500\mathrm{.}00$

Company: $58500/0\mathrm{.}225=260,000\mathrm{.}00$

a$)$ How large must the sales be in the $3$rd quarter of $2023$ so that the company's cash balance $($cash in $-$ cash out$)$ would be $40,000$ euros$/$year$,$ if the tax rate is $20\%?$

 

Answer rating: 100% (QA)

To calculate how large the sales must be in the 3rd quarter of 2023 for the company to achieve a cas... View the full answer