Mandeville Corporation manufactures stuffed animals and has the following revenue and cost structure. The company's tax rate is 40%.

Required:
a. What is Mandeville's contribution margin and contribution margin ratio?
b. Calculate Mandeville's pre-tax break-even point in units and in dollars.
c. If Mandeville wants to earn $206,500 in pre-tax profits, how many units will the company need to sell?
d. If Mandeville wants to earn $150,000 in after-tax profits, how many units will the company need to sell?

Question

Mandeville Corporation manufactures stuffed animals and has the following revenue and cost structure. The company's tax rate is 40%.
  
Required:
a.	What is Mandeville's contribution margin and contribution margin ratio?
b.	Calculate Mandeville's pre-tax break-even point in units and in dollars.
c.	If Mandeville wants to earn $206,500 in pre-tax profits, how many units will the company need to sell? 
d.	If Mandeville wants to earn $150,000 in after-tax profits, how many units will the company need to sell?

Quizplus · Accepted Answer

The Answer of Mandeville Corporation manufactures stuffed animals and has the following revenue and cost structure. The company's tax rate is 40%.
  
Required:
a.	What is Mandeville's contribution margin and contribution margin ratio?
b.	Calculate Mandeville's pre-tax break-even point in units and in dollars.
c.	If Mandeville wants to earn $206,500 in pre-tax profits, how many units will the company need to sell? 
d.	If Mandeville wants to earn $150,000 in after-tax profits, how many units will the company need to sell?

Mandeville Corporation Manufactures Stuffed Animals and Has the Following Revenue