Dynamic Designs has fixed costs of $380,000 and produces one graphic arts product with a selling price of $80 and variable costs of $42 per unit. Dynamic is currently selling 18,000 units.
a. What is Dynamic's break-even point in units sold?
b. What is Dynamic's margin of safety in terms of sales revenue dollars?
c. If Dynamic has an effective tax rate of 20%, what is its current net income?

Question

Quizplus · Accepted Answer

The Answer of Dynamic Designs has fixed costs of $380,000 and produces one graphic arts product with a selling price of $80 and variable costs of $42 per unit. Dynamic is currently selling 18,000 units.
a. What is Dynamic's break-even point in units sold?
b. What is Dynamic's margin of safety in terms of sales revenue dollars?
c. If Dynamic has an effective tax rate of 20%, what is its current net income?

Dynamic Designs Has Fixed Costs of $380,000 and Produces One