Thibodeaux Corporation produces hand-dipped strawberries and frozen bananas. Fixed product costs total $230,000 and fixed selling costs total $268,200. Product sales and cost information follow:
Thibodeaux sells six strawberries for every banana. The company's tax rate is 30%.
Required:
a. How many units of each product must Thibodeaux sell to break-even?
b. How many units of each product must Thibodeaux sell to earn $148,400 on a pre-tax basis?
c. How many units of each product must Thibodeaux sell to earn $207,760 on an after-tax basis?

Question

Thibodeaux Corporation produces hand-dipped strawberries and frozen bananas. Fixed product costs total $230,000 and fixed selling costs total $268,200. Product sales and cost information follow:
  Thibodeaux sells six strawberries for every banana. The company's tax rate is 30%.
Required:
a.	How many units of each product must Thibodeaux sell to break-even?
b.	How many units of each product must Thibodeaux sell to earn $148,400 on a pre-tax basis?
c.	How many units of each product must Thibodeaux sell to earn $207,760 on an after-tax basis?

Quizplus · Accepted Answer

The Answer of Thibodeaux Corporation produces hand-dipped strawberries and frozen bananas. Fixed product costs total $230,000 and fixed selling costs total $268,200. Product sales and cost information follow:
  Thibodeaux sells six strawberries for every banana. The company's tax rate is 30%.
Required:
a.	How many units of each product must Thibodeaux sell to break-even?
b.	How many units of each product must Thibodeaux sell to earn $148,400 on a pre-tax basis?
c.	How many units of each product must Thibodeaux sell to earn $207,760 on an after-tax basis?

Thibodeaux Corporation Produces Hand-Dipped Strawberries and Frozen Bananas