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The budgeted Income statement presented below is for Burkett Corporation for the coming fiscal year. Compute the number of un
Forrester Company is considering buying new equipment that would increase monthly fixed costs from $425,000 to $445,500 and w
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Answer #1

1)in order to obtain a pretax income of 150800 $,the company should sell 60333 units.the calculation as follows

sale 19x
less:costs
direct material(235400/988000) 4.53x
direct labour(240200/988000) 4.62x
variable factory overhead 2.9x
variable marketing cost .97x
contribution 5.98x
less:total fixed costs 211200

here x is assumed the number of unit sold and finally by solving the equation,the value of we can find as 60333being number of unit to be sold.

2)the break even poit will be $810000 if the new equipment purchase and calculation as follows

contribution(sale-variable cost)(100-45) 55
contribution to sale(55/100) 0.55
fixed cost 445500
break even poin(fixed cos/contribution/sale)(445500/.55) 810000
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