Question

f Facebook BYUI Dashboard Guest -10an... Mall Eagle Company makes the MusicFinder, a sophisticated satellite radio. Eagle has experienced a steady growth in sales for the past five years. However, Ms. Luray, Eagle's CEO, believes that to maintain the company's present growth will require an aggressive advertising campaign next year. To prepare for the campaign, the company's accountant, Mr. Bednarik, has prepared and presented to Ms. Luray the following data for the current year, year 1: $ 95 38 17 150 $ Variable costs: Direct labor (per unit) Direct materials (per unit) Variable overhead (per unit) Total variable costs (per unit) Fixed costs (annual): Manufacturing Selling Administrative Totalfixed costs (annual) Selling price (per unit) Expected sales revenues, year 1 (27,000 units) $ 389,000 281,000 789,000 $ 1,459,000 406 $ 10,962,000 Eagle has an income tax rate of 30 percent. Ms. Luray has set the sales target for year 2 at a level of $12,992,000 (or 32,000 radios). Required: a. What is the projected after-tax operating profit for year 1? Anor-tax operating profit b. What is the break-even point in units for year 17 (Round up your answer to the nearest whole number.) Break-even point units c. Ms. Luray believes that to attain the sales target (32,000 radios) will require additional selling expenses of $292,000 for advertising in year 2, with all other costs remaining constant. What will be the after-tax operating profit for year 2 if the firm spends the additional $292,000? Ater-tax operating profit 22 tv W MacBook Pro

Answer 1

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