Hunter & Sons sells a single model of meat smoker for use in the home. The smokers have the following price and cost characteristics.
Sales price | $ | 550 | per smoker |
Variable costs | 330 | per smoker | |
Fixed costs | 143,000 | per month | |
Hunter & Sons is subject to an income tax rate of 40 percent.
Required:
a. How many smokers must Hunter & Sons sell
every month to break even?
b. How many smokers must Hunter & Sons sell to earn a monthly operating profit of $39,600 after taxes?
|
a. Contribution margin per unit = Sales price per unit - Variable costs per unit
= $550 - $330
= $220
Units to be sold = Fixed costs / Contribution margin per unit
= $143,000 / $220
= 650
b. Profit before taxes = Profit after tax / (1 - tax rate)
= $39,600 / ( 1 - 0.4)
= $66,000
Units to be sold = (Fixed costs + Profit before taxes) / Contribution margin per unit
= ($143,000 + $66,000) / $220
= 950
Hunter & Sons sells a single model of meat smoker for use in the home. The...
Hunter & Sons sells a single model of meat smoker for use in the home. The smokers have the following price and cost characteristics Sales price Variable costs Fixed costs $ 84 per smoker 35 per smoker 343,000 per month Hunter & Sons is subject to an income tax rate of 40 percent Required: a. How many smokers must Hunter & Sons sell every month to break even? Break-even sales in units b. How many smokers must Hunter & Sons...
Hunter & Sons sells a single model of meat smoker for use in the home. The smokers have the following price and cost characteristics: Sales price Variable costs Fixed costs $ 83 per smoker 35 per smoker 384,000 per month Hunter & Sons is subject to an income tax rate of 40 percent. Required: a. How many smokers must Hunter & Sons sell every month to break even? Break-even sales in units b. How many smokers must Hunter & Sons...
Hunter & Sons sells a single model of meat smoker for use in the home. The smokers have the following price and cost characteristics. Sales price Variable costs Fixed costs $ 77 per smoker 36 per smoker 315,700 per month Hunter & Sons is subject to an income tax rate of 40 percent. Required: a. How many smokers must Hunter & Sons sell every month to break even? b. How many smokers must Hunter & Sons sell to earn a...
Hunter & Sons sells a single model of meat smoker for use in
the home. The smokers have the following price and cost
characteristics.
Sales price
$
84
per smoker
Variable costs
32
per smoker
Fixed costs
395,200
per month
Hunter & Sons is subject to an income tax rate of 40
percent.
Required:
a. How many smokers must Hunter & Sons sell
every month to break even?
b. How many smokers must Hunter & Sons sell
to earn a...
Hunter & Sons sells a single model of meat smoker for use in the home. The smokers have the following price and cost characteristics. Sales price Variable costs Fixed costs $ 76 per smoker 38 per smoker 281,200 per month Hunter & Sons is subject to an income tax rate of 40 percent. Required: a. How many smokers must Hunter & Sons sell every month to break even? b. How many smokers must Hunter & Sons sell to earn a...
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