alwaysaprofit
Dec 14, 2011, 12:07 PM
Lance Curry Inc. Has three products X, why, and Z. X sells for $20 with a variable cost of $8, why sells for $30 with a variable cost of $21, Z sells for $50 with a variable cost of $40. Fixed costs amount to $214,000. Furthermore, assume that for every 5 units of X that are sold, the company sells 3 units of why and 2 units of Z.
1)Â Â Â Â Â Determine break-even in units and dollars of each product.
2)Â Â Â Â Â Assuming a desired profit of $107,000 (assume no taxes), how much of each product should be sold?
3)Â Â Â Â Â Assuming a desired net profit of $149,800 and a tax rate of 30%, how much of each product should be sold?
4)     At a targeted profit level of $53,500 (no taxes), by how much would profit increase if sales increase by 80%? (Hint: use Operating Leverage). Show the percentage and the amount.
1)Â Â Â Â Â Determine break-even in units and dollars of each product.
2)Â Â Â Â Â Assuming a desired profit of $107,000 (assume no taxes), how much of each product should be sold?
3)Â Â Â Â Â Assuming a desired net profit of $149,800 and a tax rate of 30%, how much of each product should be sold?
4)     At a targeted profit level of $53,500 (no taxes), by how much would profit increase if sales increase by 80%? (Hint: use Operating Leverage). Show the percentage and the amount.