Question

A firm expects to sell 26,000 units of its product at $11 per unit. Pretax income...

A firm expects to sell 26,000 units of its product at $11 per unit. Pretax income is predicted to be $61,000. If the variable costs per unit are $6, total fixed costs must be:

Multiple Choice

  • $69,000.

  • $156,000.

  • $225,000.

  • $43,000.

  • $286,000

0 0
Add a comment Improve this question Transcribed image text
Answer #1

Contribution margin=Sales-Variable costs

=(11-6)=$5 per unit

Total Contribution margin=(5*26,000)=$130,000

Contribution margin-Fixed costs=Target pre-tax income

130,000-Fixed costs=61,000

Fixed costs=130,000-61,000

=$69,000.

Add a comment
Know the answer?
Add Answer to:
A firm expects to sell 26,000 units of its product at $11 per unit. Pretax income...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions
ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT