Enola, SA., manufactures a product that sells for £400. The variable costs per unit are as follows:
During the year, the budgeted fixed manufacturing overhead is estimated to be £500,000, and budgeted fixed selling and administrative costs are expected to be £250,000. Variable selling costs are £20 per unit.
Required:

a.
Determine the break-even point in units.
b.
Determine the number of units that must be sold to earn £300,000 in profit before taxes.
c.
Determine the number of units that must be sold to generate an after-tax profit of £90,000 if there is a 40 percent tax rate.

Question

Enola, SA., manufactures a product that sells for £400. The variable costs per unit are as follows:
During the year, the budgeted fixed manufacturing overhead is estimated to be £500,000, and budgeted fixed selling and administrative costs are expected to be £250,000. Variable selling costs are £20 per unit.
Required:
  
a.
Determine the break-even point in units.
b.
Determine the number of units that must be sold to earn £300,000 in profit before taxes.
c.
Determine the number of units that must be sold to generate an after-tax profit of £90,000 if there is a 40 percent tax rate.

Quizplus · Accepted Answer

The Answer of Enola, SA., manufactures a product that sells for £400. The variable costs per unit are as follows:
During the year, the budgeted fixed manufacturing overhead is estimated to be £500,000, and budgeted fixed selling and administrative costs are expected to be £250,000. Variable selling costs are £20 per unit.
Required:
  
a.
Determine the break-even point in units.
b.
Determine the number of units that must be sold to earn £300,000 in profit before taxes.
c.
Determine the number of units that must be sold to generate an after-tax profit of £90,000 if there is a 40 percent tax rate.

Enola, SA, Manufactures a Product That Sells for £400