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Big Ben Golf Accessories makes novelty electronic equipment for golf enthusiasts. One of their most ...

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Big Ben Golf Accessories makes novelty electronic equipment for golf enthusiasts. One of their most ...

Big Ben Golf Accessories makes novelty electronic equipment for golf enthusiasts. One of their most popular accessories is the "Putting Magician." This electronic device analyses puts and provides instruction on the direction and pace of a put. Although not allowed under the rules amateur golfers have purchased or received as a gift 17,300 of these last year from a total production of 18,000 units. The recommended retail price is $139 and the wholesale price received by Big Ben Golf Accessories is $90.

The company's variable production costs are $62 per unit. Per unit fixed manufacturing costs are $7. Other fixed costs are $65,000 for rent; $290,000 in salaries; $75,000 for a product endorsement. The tax rate is 25%.

Required:
a. How many units must be sold to breakeven?
b. What is the amount of sales in dollars required to earn an after-tax profit of $300,000?

Textbook

Cost Accounting: A Managerial Emphasis, Canadian Edition

Edition: 7^th

Authors: Horngren, Datar, Rajan, Beaubien

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StormLrd Author

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6 years ago

this is exactly what I needed

acaruso

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Thank you, thank you, thank you!

sleinhi

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Thanks for your help!!

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