Williams & williams Co. produces plastic spray bottles and wants to earn a before tax profit...
Homework Answers
Solution:
Contribution margin per bottle = Selling price - Variable cost = $1.40 - $0.70 = $0.70 per bottle
Nos of bottles to be sold to meet profit goal = (Fixed costs + Desired profit) / Contribution margin per unit
= ($457,000 + $250,000) / $0.70 = 1010000 bottles
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Cornerstone Exercise 16.4 (Algorithmic)
After-Tax Profit Targets
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Direct labor
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Cornerstone Exercise 16.4 (Algorithmic)
After-Tax Profit Targets
Olivian Company wants to earn $360,000 in net (after-tax) income
next year. Its product is priced at $400 per unit. Product costs
include:
Direct materials
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Direct labor
$88.00
Variable overhead
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Total fixed factory overhead
$440,000
Variable selling expense is $16 per unit; fixed selling and
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Required:
1. Calculate the before-tax profit needed to
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