Second Time Round Accounting specialises in second hand accounting and business text books. Sales volume last...

 

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Second Time Round Accounting specialises in second hand accounting and business text books. Sales volume last year amounted to 54,000 texts. The company's annual fixed expenses are $240,000. The average sales price of a second hand text is $30. It costs the company $17 to acquire each text. The books are sold by university students who are paid a sales commission of 10% of sales revenue. Required: 1. Calculate the number of texts that Second Time Round would have needed to sell in order to break-even. (5 marks) 2. What was Second Time Round's profit last year? (3 marks) 3. How much sales revenue must the company generate in order to earn a target net profit (before tax) of $340,000 last year? Second Time Round Accounting specialises in second hand accounting and business text books. Sales volume last year amounted to 54,000 texts. The company's annual fixed expenses are $240,000. The average sales price of a second hand text is $30. It costs the company $17 to acquire each text. The books are sold by university students who are paid a sales commission of 10% of sales revenue. Required: 1. Calculate the number of texts that Second Time Round would have needed to sell in order to break-even. (5 marks) 2. What was Second Time Round's profit last year? (3 marks) 3. How much sales revenue must the company generate in order to earn a target net profit (before tax) of $340,000 last year?

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