Question

Use the information for Austin Automotive in Exercise 16 and assume a tax rate for the company of 30 percent.
In Exercise 16, Austin Automotive sells an auto accessory for $ 180 per unit. The company’s variable cost per unit is $ 30 for direct material, $ 25 per unit for direct labor, and $ 17 per unit for overhead. Annual fixed production overhead is $ 37,400, and fixed selling and administrative overhead is $ 25,240.
a. If Austin Automotive wants to earn an after- tax profit of $ 135,800, how many units must the company sell?
b. If Austin Automotive wants to earn an after- tax profit of $ 7.20 on each unit sold, how many units must the company sell?



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  • CreatedJune 03, 2014
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