Ronald Enterprises, Ltd. has estimated the following costs for producing and selling 15,000 units of its product:

Question:

Ronald Enterprises, Ltd. has estimated the following costs for producing and selling 15,000 units of its product:
Ronald Enterprises, Ltd. has estimated the following costs for producing

Ronald Enterprises' income tax rate is 40%.
Instructions
(a) Given that the selling price of one unit is $38, calculate how many units Ronald Enterprises would have to sell in order to break even.
(b) Assume the selling price is $43 per unit. Calculate how many units Ronald Enterprises would have to sell in order to produce a profit of $25,000 before taxes.
(c) Calculate what price Ronald Enterprises would have to charge in order to produce a profit of $30,000 after taxes if 7,500 units were produced and sold.
(d) Calculate what price Ronald Enterprises would have to charge in order to produce a before-tax profit equal to 30% of sales if 9,000 units were produced and sold.

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Related Book For  book-img-for-question

Managerial Accounting Tools for Business Decision Making

ISBN: 978-1118856994

4th Canadian edition

Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso, Ibrahim M. Aly

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