The Newman Company produces two models of garage door openers, Standard and Deluxe.
The company expects to sell 900 units of the Standard model and 300 units of the Deluxe model (a sales mix of 3:1).
A projected income statement for the firm as a whole for 2006 follows: a. Determine the break-even point in sales for 2006.
b. Determine sales revenue necessary to generate a before-tax profit of $150,000.
c. Determine sales revenue necessary to generate an after-tax profit of $210,000 if the tax rate is 30 percent.

Question

The Newman Company produces two models of garage door openers, Standard and Deluxe.
The company expects to sell 900 units of the Standard model and 300 units of the Deluxe model (a sales mix of 3:1).
A projected income statement for the firm as a whole for 2006 follows:  a. Determine the break-even point in sales for 2006.
b. Determine sales revenue necessary to generate a before-tax profit of $150,000.
c. Determine sales revenue necessary to generate an after-tax profit of $210,000 if the tax rate is 30 percent.

Quizplus · Accepted Answer

The Answer of The Newman Company produces two models of garage door openers, Standard and Deluxe.
The company expects to sell 900 units of the Standard model and 300 units of the Deluxe model (a sales mix of 3:1).
A projected income statement for the firm as a whole for 2006 follows:  a. Determine the break-even point in sales for 2006.
b. Determine sales revenue necessary to generate a before-tax profit of $150,000.
c. Determine sales revenue necessary to generate an after-tax profit of $210,000 if the tax rate is 30 percent.

The Newman Company Produces Two Models of Garage Door Openers