(Break-even point and selling price) Specialty Steel, Inc. will manufacture and sell 190,000 units next year....
(Break-even point and selling price) Specialty Steel, Inc. will manufacture and sell 190,000 units next year. Fixed costs will total $330,000, and variable costs will be 50 percent of sales.
a. The firm wants to achieve a level of earnings before interest and taxes of $260,000. What selling price per unit is necessary to achieve this result?
b. Set up a pro forma income statement to verify your solution to part a
Homework Answers
a.
EBIT = $260,000
(0.50×190,000)P - 330,000 = 260,000
P = $6.21
Price per Unit = $6.21
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(Break-even point and selling price) Specialty Steel, Inc.
will manufacture and sell 190,000 units next year....
(Break-even point and selling price) Specialty Steel, Inc. will manufacture and sell 190,000 units next year....
(Break-even point and selling price) Specialty Steel, Inc. will manufacture and sell 190,000 units next year. Fixed costs will total $340,000, and variable costs will be 60 percent of sales. a. The firm wants to achieve a level of earnings before interest and taxes of $270,000. What selling price per unit is necessary to achieve this result? b. Set up a pro forma income statement to verify your solution to part a. a. What selling price per unit is necessary...
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Break-Even Point in Units Chillmax Company plans to sell 3,500 pairs of shoes at $60 each...
Break-Even Point in Units
Chillmax Company plans to sell 3,500 pairs of shoes at $60
each in the coming year. Variable cost is 35% of the sales price;
contribution margin is 65% of the sales price. Total fixed cost
equals $78,000 (includes fixed factory overhead and fixed selling
and administrative expense).
Required:
1. Calculate the sales revenue that Chillmax must make to
break even by using the break-even point in sales equation. $
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E18-12 In 2013, Manhoff Company had a break-even point of $350,000 based on a selling price of $5 per unit and fixed costs of $112,000. In 2014, the selling price and the variable costs per unit did not change, but the break-even point increased to S420,000. Instructions (a) Compute the variable costs per unit and the contribution margin ratio for 2013. (b) Compute the increase in fixed costs for 2014
(Break-even point and selling price) Specialty Steel, Inc. will manufacture and sell 190,000 units next year. Fixed costs will total $340,000, and variable costs will be 60 percent of sales. a. The firm wants to achieve a level of earnings before interest and taxes of $270,000. What selling price per unit is necessary to achieve this result? b. Set up a pro forma income statement to verify your solution to part a. a. What selling price per unit is necessary...
Break-Even Point in Units
Chillmax Company plans to sell 3,500 pairs of shoes at $60
each in the coming year. Variable cost is 35% of the sales price;
contribution margin is 65% of the sales price. Total fixed cost
equals $78,000 (includes fixed factory overhead and fixed selling
and administrative expense).
Required:
1. Calculate the sales revenue that Chillmax must make to
break even by using the break-even point in sales equation. $
2. Prepare a contribution margin income statement...
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