Question

In: Finance

Simple Metal​ Works, Inc. will manufacture and sell 150,000 units next year. Fixed costs will total...

Simple Metal​ Works, Inc. will manufacture and sell 150,000 units next year. Fixed costs will total ​$260,000​, and variable costs will be 55 percent of sales. a. The firm wants to achieve a level of earnings before interest and taxes of ​$300,000. What selling price per unit is necessary to achieve this​ result? b. Set up an analytical income statement to verify your solution to part ​(a​).

Solutions

Expert Solution

jeff jeffy answered 11 months ago
Next > < Previous

Related Solutions

Simple Metal Works, Inc. will manufacture and sell 250,000 units next year. Fixed costs will total...
Simple Metal Works, Inc. will manufacture and sell 250,000 units next year. Fixed costs will total $330,000, and variable costs will be 60 percent of sales. a. The firm wants to achieve a level of earnings before interest and taxes of $250,000. What selling price per unit is necessary to achieve this​ result? b. Set up an analytical income statement to verify your solution to part
BREAKEVEN POINT AND SELLING PRICE UAE Industries will manufacture and sell 325,000 units next year. Fixed...
BREAKEVEN POINT AND SELLING PRICE UAE Industries will manufacture and sell 325,000 units next year. Fixed costs will total SAR 675,000, and variable costs will be 36% thirty-six percent) of sales. a. The firm wants to achieve a level of earnings before interest and taxes of SAR 300,000. What selling price per unit is necessary to achieve this result? b. Set up a pro forma income statement to verify your solution to part a. Solution: DATA Sell 325,000 Fixed Costs...
Gamut Satellite Inc. produces satellite earth stations that sell for $150,000 each. The firm’s fixed costs,...
Gamut Satellite Inc. produces satellite earth stations that sell for $150,000 each. The firm’s fixed costs, F, are $1.5 million, 20 earth stations are produced and sold each year, profits total $400,000, and the firm’s assets (all equity financed) are $5 million. The firm estimates that it can change its production process, adding $10 million to assets and $500,000 to fixed operating costs. This change will reduce variable costs per unit by $5,000 and increase output by 30 units. However,...
No of units   Fixed costs   Total variable costs   Total Costs   Total Sales 0   15,000   0   15,000  ...
No of units   Fixed costs   Total variable costs   Total Costs   Total Sales 0   15,000   0   15,000   0 50   15,000   10,500   25,500   15,000 100   15,000   21,000   36,000   30,000 150   15,000   31,500   46,500   45,000 200   15,000   42,000   57,000   60,000 250   15,000   52,500   67,500   75,000 300   15,000   63,000   78,000   90,000 Create a CVP graph.
Fixed costs are $3,000, variable costs are $5 per unit. The company will manufacture 100 units...
Fixed costs are $3,000, variable costs are $5 per unit. The company will manufacture 100 units and chart a 50% markup. Using the cost-plus pricing method, what will the selling price be?
XYZ, Inc. produces a product that will sell this year for $200 per unit. Fixed costs...
XYZ, Inc. produces a product that will sell this year for $200 per unit. Fixed costs are expected to total $10,000 this year and remain constant for the following four years. Variable costs are expected to be $75 per unit this year and increase at a rate of 5% in each of the following four years. XYZ, Inc. expects to sell 2,000 units this year and in each of the following four years. To earn an equivalent uniform annual gross...
Question Farrow Co. expects to sell 150,000 units of its product in the next period with the following results.
Question Farrow Co. expects to sell 150,000 units of its product in the next period with the following results.Sales (150,000 units) $2,250,000Costs and expensesDirect materials . 300,000Direct labor 600,000Overhead . 150,000Selling expenses . 225,000Administrative expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 385,500Total costs and...
company has variable costs of $34.50, total fixed costs of $21,700,000 and plans to sell its...
company has variable costs of $34.50, total fixed costs of $21,700,000 and plans to sell its product for $45.00. In 2018 it sold 2,400,000 units of product. Required: e) what is the operating leverage in 2018; f) the production manager wants to automate production and lower variable costs by $3 per unit and spend an additional $4,500,000 fixed costs per year- is this more profitable? g) The sales manager wants to drop prices by $2.50 per unit and spend an...
Moe's building costs $800,000 and it is expected to make $150,000 per year for the next...
Moe's building costs $800,000 and it is expected to make $150,000 per year for the next 6 years. Given a required rate of return of 12% and maximum required payback period of 4 years, calculate the Payback Period and Discounted Payback Period for this big project and explain whether or not the big project should be accepted under each of those two methods.
Your company has fixed costs of $150,000 per year. The variable costs per unit in 2018...
Your company has fixed costs of $150,000 per year. The variable costs per unit in 2018 were $3 per unit, and 30,000 units were produced that year. Your company uses cost-based pricing and has a profit margin of $3 per unit. In 2019, production increased and your team had more experience—variable costs went down to $2 per unit because of your team’s higher skill and 65,000 units were produced that year. What is the change in selling price from 2018...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT