Big Ben Golf Accessories makes novelty electronic equipment for golf enthusiasts. One of their most popular accessories
Question:
Big Ben Golf Accessories makes novelty electronic equipment for golf enthusiasts. One of their most popular accessories is the "Putting Magician." This electronic device analyses puts and provides instruction on the direction and pace of a put. Although not allowed under the rules amateur golfers have purchased or received as a gift 17,300 of these last year from a total production of 18,000 units. The recommended retail price is $139 and the wholesale price received by Big Ben Golf Accessories is $90.
The company's variable production costs are $62 per unit. Per unit fixed manufacturing costs are $7. Other fixed costs are $65,000 for rent; $290,000 in salaries; $75,000 for a product endorsement. The tax rate is 25%.
Required:
a. How many units must be sold to breakeven?
b. What is the amount of sales in dollars required to earn an after-tax profit of $300,000?
Quantitative Analysis For Management
ISBN: 9780137943609
14th Edition
Authors: Barry Render, Ralph M. Stair, Michael E. Hanna, Trevor S. Hale