A firm has the following income statement For a month. S Sales: 3,000 units at $60/unit...
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A firm has the following income statement For a month. S Sales: 3,000 units at $60/unit Less: Cost of Goods Sold. Variable Production Cost Fixed Production Cost Gross Margin Selling and Administrative Expenses Variable Selling Cost Fixed Selling Expenses Net Income Before Taxes $180,000 130,000 A. Find the firm's breakeven output. 12.500 37,500 16,000 4,500 17,000 (5 marks) B. If it wishes to have a monthly net income before taxes of $28,000 and its cost structure remains as above, what quantity of output will it need to sell? (5 marks) c. If its variable production costs increase by $6 per unit, what will be its breakeven output? (5marks) D. After the increase in costs in 3, what output will it need to sell if it wishes to have the $15,000 monthly pretax profit stated earlier? (5 marks) E. Given the variable production cost increase but no change in fixed costs, what will be the firm's monthly profit if it sells 4,000 units of output per month? (5 marks) A firm has the following income statement For a month. S Sales: 3,000 units at $60/unit Less: Cost of Goods Sold. Variable Production Cost Fixed Production Cost Gross Margin Selling and Administrative Expenses Variable Selling Cost Fixed Selling Expenses Net Income Before Taxes $180,000 130,000 A. Find the firm's breakeven output. 12.500 37,500 16,000 4,500 17,000 (5 marks) B. If it wishes to have a monthly net income before taxes of $28,000 and its cost structure remains as above, what quantity of output will it need to sell? (5 marks) c. If its variable production costs increase by $6 per unit, what will be its breakeven output? (5marks) D. After the increase in costs in 3, what output will it need to sell if it wishes to have the $15,000 monthly pretax profit stated earlier? (5 marks) E. Given the variable production cost increase but no change in fixed costs, what will be the firm's monthly profit if it sells 4,000 units of output per month? (5 marks)
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Answer rating: 100% (QA)
Lets go through each part of the question step by step A Breakeven Output Breakeven occurs when total revenue equals total costs both variable and fix... View the full answer
Related Book For
Managerial Accounting
ISBN: 978-0618777181
8th Edition
Authors: Susan V. Crosson, Belverd E. Needles
Posted Date:
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