Use the following information for following questions

Bijoux Ltd manufactures and sells a single product. This product has the following operational data:

$\begin{array}{lr}
\text { Unit sales price } & 50 \
\text { Variable manufacturing cost per unit } & 25 \
\text { Fixed manufacturing costs } & 72,000 \
\text { Variable selling cost per unit } & 2 \
\text { Fixed selling costs } & 57,000 \
\text { Marginal tax rate } & 20 \%
\end{array}$
-Calculate the number of units required to achieve a pre-tax profit of $125 000.
A) 7 479
B)10 160
C) 5 435
D) 11 044

Question

Use the following information for following questions

Bijoux Ltd manufactures and sells a single product. This product has the following operational data:

$\begin{array}{lr}
\text { Unit sales price } & 50 \
\text { Variable manufacturing cost per unit } & 25 \
\text { Fixed manufacturing costs } & 72,000 \
\text { Variable selling cost per unit } & 2 \
\text { Fixed selling costs } & 57,000 \
\text { Marginal tax rate } & 20 \%
\end{array}$
-Calculate the number of units required to achieve a pre-tax profit of $125 000.
A) 7 479
B)10 160
C) 5 435
D) 11 044

Quizplus · Accepted Answer

To calculate the number of units required to achieve a pre-tax profit of $125,000, we use the formula for the break-even point in units, adjusted for the desired profit:$$ \text{Required Units} = \frac{\text{Fixed Costs} + \text{Desired Profit}}{\text{Unit Contribution Margin}} $$Where:- Fixed Costs = Fixed manufacturing costs + Fixed selling costs = $72,000 + $57,000 = $129,000- Unit Contribution Margin = Unit sales price - Variable manufacturing cost per unit - Variable selling cost per unit = $50 - $25 - $2 = $23- Desired Profit = $125,000$$ \text{Required Units} = \frac{$129,000 + $125,000}{\$23} = \frac{$254,000}{\$23} = 11,043.478 $$Rounding up, since we can't sell a fraction of a unit, gives us 11,044 units.

Use the Following Information for Following Questions Bijoux

Use the Following Information for Following Questions

Bijoux