The Orton Company produces two types of food processors. Information about the two products for 2006 is as follows: The company expects fixed costs to be $150,000 in 2006. The firm expects 80% of its sales (in units) to be Regular model food processors.
a. Determine the break-even point in units.
b. Determine sales in units of Regular and Deluxe models necessary to generate a before-tax profit of $90,000.
c. Determine sales in units of Regular and Deluxe models necessary to generate an after-tax profit of $90,000 if the tax rate is 40 percent.

Question

The Orton Company produces two types of food processors. Information about the two products for 2006 is as follows:  The company expects fixed costs to be $150,000 in 2006. The firm expects 80% of its sales (in units) to be Regular model food processors.
a. Determine the break-even point in units.
b. Determine sales in units of Regular and Deluxe models necessary to generate a before-tax profit of $90,000.
c. Determine sales in units of Regular and Deluxe models necessary to generate an after-tax profit of $90,000 if the tax rate is 40 percent.

Quizplus · Accepted Answer

The Answer of The Orton Company produces two types of food processors. Information about the two products for 2006 is as follows:  The company expects fixed costs to be $150,000 in 2006. The firm expects 80% of its sales (in units) to be Regular model food processors.
a. Determine the break-even point in units.
b. Determine sales in units of Regular and Deluxe models necessary to generate a before-tax profit of $90,000.
c. Determine sales in units of Regular and Deluxe models necessary to generate an after-tax profit of $90,000 if the tax rate is 40 percent.

The Orton Company Produces Two Types of Food Processors