Question

A company has the following data for last year. Help Save Price per unit Variable cost per unit Fixed cost $300 $200 51,500 The company would like to generate a target profit $23,200 after paying taxes. Their tax rate is estimated be 20% How many units of its product does the company have to sell in order toachieve their goal? (All answers are whole numbers -- unless specified otherwise. You should NOT include the $ sign or a comma Eg, you should 1000 for one thousand. Negative numbers should be added with a minus sign, e.g.-1000 for a decrease or loss of one thousand Number of units required

Answer 1

Answer------------Number of units required= 805 units

Working

A	Sale Price per unit	$                 300.00
B	Variable Cost per Unit	$                 200.00
C=A - B	Unit Contribution	$                 100.00
D	Total Fixed cost + Desired Income (51,500+29,000)	$           80,500.00
E=D/C	Units required to be sold (80,500/$100)	805

Desired income before tax will be taken in above calculation. Net income desired is $23,200 hence income before tax will be 23,200/80 x 100=$29,000.

Answer-2-

False

Explanation -

In case of raw materials purchased on account, the entry will have effect of increase in raw materials and increase in accounts payable.

As both the raw material on asset side will increase and also on the liabilities side Accounts payables increase.

In the given case , it shows that Accounts payables will decrease that is not correct. So it is a false statement.

Answer-3-

The false statement regarding job order costing is "It is used for manufacturing companies, but not service companies"

Hence option b is correct.