Top Posters
Since Sunday
45
s
39
11
s
6
6
6
b
5
s
5
D
5
t
5
i
5
v
5
Home Q & A Board Other Fields Homework Help Business Accounting
New Topic  
SeaBass2013 SeaBass2013
wrote...
Go to Answer
Posts: 70
Rep: 0 0
A week ago
Use the information provided below to answer the following questions:

Sales ($50 per unit)$10,000
Cost of goods sold (all variable costs)6,000
Fixed costs2,800

Required:

a.How many units would the company need to sell to earn $4,000 in operating income?
b.How many units would the company need to sell to earn $4,000 in net income
if the tax rate is 20%?
c.By how much would operating income change from part (b) with a 10% increase
in units sold?
Textbook 
Managerial Accounting

Managerial Accounting


Edition: 4th
Author:
Read 32 times
1 Reply
Replies
Answer verified by a subject expert
choroni64choroni64
wrote...
#1
Posts: 82
Rep: 0 0
A week ago
Sign in or Sign up in seconds to unlock everything for free
More solutions for this book are available here
a.$10,000 ÷ $50 = 200 units; ($10,000 - $6,000) ÷ 200 = $20 Unit CM;
($2,800 + $4,000) ÷ $20 = 340
b.$4,000 ÷ (1 - .20) = $5,000 operating income; ($2,800 + $5,000) ÷ $20 = 390
c.($390 × ($50 - $30)) ÷ ($390 × ($50 - $30) - $2,800) = 1.56 degree of
operating leverage;
1.56 × .10 = 15.6%; $5,000 × 0.156 = $780
1

Related Topics

SeaBass2013 Author
wrote...

A week ago
This site is awesome
my life
wrote...

Yesterday
Correct Slight Smile TY
veronee_madison
wrote...

2 hours ago
Good timing, thanks!
New Topic      
Quick Reply
Explore
Post your homework questions and get free online help from our incredible volunteers
  239 People Browsing
 234 Signed Up Today
Start New Topic Take the Tour Study Tips Study ToolsNew Topics Trending Browse by Textbook
Related Images
  
 405
  
 19
  
 17
Your Opinion
What percentage of nature vs. nurture dictates human intelligence?
Votes: 324
Previous poll results: How often do you eat-out per week?