Paul's Peanuts has total fixed costs of $23,996. If the company's contribution margin is 20%, the...

Question

Question

Paul's Peanuts has total fixed costs of $23,996. If the company's contribution margin is 20%, the...

Paul's Peanuts has total fixed costs of $23,996. If the company's contribution margin is 20%, the income tax rate is 35% and the selling price of a box of Peanuts is $20, how many boxes of Peanuts would the company need to sell to produce a net income of $13,975?

A.10,750
B.1,680
C.11,374
D. 2,844

business accounting

Add a comment Improve this question Transcribed image text

Answer 1

Answer #1

Contribution margin per unit = $20*20% = $4

Let no. of units sold be A

[(Contribution margin per unit x no. of units sold) - Fixed cost] x (1-0.35) = Net income

[(4* A) - 23996]*(1-0.35)] = 13975

No. of units sold = 13975/4 = 11374

Option C. is correct answer.

Add a comment

Answer 2

Similar Homework Help Questions

Requirements 1. What is the company's contribution margin per unit? Contribution margin percentage? Total contribution margin?...

Requirements 1. What is the company's contribution margin per unit? Contribution margin percentage? Total contribution margin? 2. What would the company's monthly operating income be if the company sold 150,000 units? 3. What would the company's monthly operating income be if the company had sales of $4,500,000? 4. What is the breakeven point in units? In sales dollars? 5. How many units would the company have to sell to earn a target monthly profit of $260,400? 6. Management is currently...
6. Assume total fixed costs of $249600, variable costs per unit of $6, and contribution margin...

6. Assume total fixed costs of $249600, variable costs per unit of $6, and contribution margin per unit of $4. What are the sales dollars required to earn a target net income of $78000 assuming a tax rate of 20%? A. $546000 B. $867750 C. $780000 D. $819000 6. Assume a sales price per unit of $20, variable cost per unit $10, and total fixed costs of $16200. If no units are sold, how much cost would the company incur?...
Assume total fixed costs of $156800, variable costs per unit of $8, and contribution margin per...

Assume total fixed costs of $156800, variable costs per unit of $8, and contribution margin per unit of $4. How many units must be sold to meet a target net income of $49000, assuming a tax rate of 20%? 25725 O 51450 49000 O 54513

A contribution margin income statement organizes costs by behavior (variable or fixed), rather than by function...

A contribution margin income statement organizes costs by behavior (variable or fixed), rather than by function (operating, selling, or administrative). The contribution margin is the difference between sales and variable expenses. Byron Manufacturing has one product that sells for $24.00 per unit. The company estimates fixed costs at $6,000, direct materials at $4.00 per unit, direct labor at $5.00 per unit, and variable overhead costs at $3.00 per unit. Fill in the contribution margin income statement when 730 units are...
A company has a unit contribution margin of $50, fixed costs of $15,000 and a target...

A company has a unit contribution margin of $50, fixed costs of $15,000 and a target profit of $20,000 after-tax. If the tax rate is 20% the company must sell ________ units in order to earn the target profit.
5. Below is an income statement for Jean Simmons Company:Sales$300,000 Variable costs(150,000)Contribution margin$150,000 Fixed costs(100,000)Profit before...

5. Below is an income statement for Jean Simmons Company:Sales$300,000 Variable costs(150,000)Contribution margin$150,000 Fixed costs(100,000)Profit before taxes$ 50,000 1) What was the company's margin of safety in dollars?2) If the unit sales price for Jean Simmons’s sole product was $10, how many units would it have needed to sell to produce a profit of $40,000?

Alpha Company's fixed costs for the year amounted to $450,000 and its unit contribution margin was...

Alpha Company's fixed costs for the year amounted to $450,000 and its unit contribution margin was $30 per unit. Beta Company's fixed costs for the year also amounted to $450,000 but its unit contribution margin was $20 per unit. Which company had the higher break-even point?
Problem 21-1A Contribution margin income statement and contribution margin ratio LO A1 The following costs result...

Problem 21-1A Contribution margin income statement and contribution margin ratio LO A1 The following costs result from the production and sale of 4,000 drum sets manufactured by Tight Drums Company for the year ended December 31, 2017. The drum sets sell for $250 each. The company has a 25% income tax rate. $ 68,000 328,000 104,000 60,000 Variable production costs Plastic for casing Wages of assembly workers Drum stands Variable selling costs Sales commissions Fixed manufacturing costs Taxes on factory...
Wellington Cabinets has fixed costs totaling $96,000. Its contribution margin per unit is $1.50, and the...

Wellington Cabinets has fixed costs totaling $96,000. Its contribution margin per unit is $1.50, and the selling price is $5.50 per unit. If they desire a profit of $150,000, how many units must they sell? How many sales dollars must they earn?

A contribution margin income statement organizes costs by behavior

Contribution Margin Income StatementA contribution margin income statement organizes costs by behavior (variable or fixed), rather than by function (operating, selling, or administrative). The contribution margin is the difference between sales and variable expenses .Byron Manufacturing has one product that sells for $24.00 per unit. The company estimates fixed costs at $6,000, direct materials at $4.00 per unit, direct labor at $5.00 per unit, and variable overhead costs at $3.00 per unit.Fill in the contribution margin income statement when 730...

Paul's Peanuts has total fixed costs of $23,996. If the company's contribution margin is 20%, the...

Homework Answers

Add Answer to:
Paul's Peanuts has total fixed costs of $23,996. If the company's contribution margin is 20%, the...

Post as a guest

Earn Coins

Requirements 1. What is the company's contribution margin per unit? Contribution margin percentage? Total contribution margin?...

6. Assume total fixed costs of $249600, variable costs per unit of $6, and contribution margin...

Assume total fixed costs of $156800, variable costs per unit of $8, and contribution margin per...

A contribution margin income statement organizes costs by behavior (variable or fixed), rather than by function...

A company has a unit contribution margin of $50, fixed costs of $15,000 and a target...

5. Below is an income statement for Jean Simmons Company:Sales$300,000 Variable costs(150,000)Contribution margin$150,000 Fixed costs(100,000)Profit before...

Alpha Company's fixed costs for the year amounted to $450,000 and its unit contribution margin was...

Problem 21-1A Contribution margin income statement and contribution margin ratio LO A1 The following costs result...

Wellington Cabinets has fixed costs totaling $96,000. Its contribution margin per unit is $1.50, and the...

A contribution margin income statement organizes costs by behavior

Paul's Peanuts has total fixed costs of $23,996. If the​ company's contribution margin is 20​%, the...

Homework Answers