A felt-tip pen manufacturer is forecasted to sell 31000 pens next month. Their fixed costs are...

A felt-tip pen manufacturer is forecasted to sell 31000 pens next month. Their fixed costs are $23400 per month and variable costs are $0.35 per pen.

Management wants to generate $12000 in profits next month. Assuming that the demand is met, what must the selling price be?

Your Answer:

Solutions

Expert Solution

Sales - Variable costs - Fixed costs = Profit

(31,000 * Selling price) - (31,000 * $0.35) - $23,400 = $12,000

31,000 * Selling price = $46,250

Selling price = $1.49 (rounded to 2 decimal places)

ekkarill92 answered 1 year ago

Next > < Previous

Related Solutions

Comprehensive In Class Problem Cost Profit Relationships A manufacturer predicts fixed costs of $502,000 for next...

Comprehensive In Class Problem Cost Profit Relationships A manufacturer predicts fixed costs of $502,000 for next year. Its one product sells for $180 per unit and it incurs variable costs of $126 per unit. Its target (pretax) income is $200,000. Compute the contribution margin ratio Compute the dollars sales needed to yield the target income Compute the unit sales needed to yield the target income The sales mix of a company’s two products, X and Y, is 2:1. Unit variable...

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

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).

If a stock costs $55 one month and drops to $45 the next month, what is...

If a stock costs $55 one month and drops to $45 the next month, what is the expected stock price the next month if we assume the stock follows a random walk? Explain both technical and fundamental analysis and what form of the efficient market hypothesis corresponds to each.

Wandel Inc. has forecasted sales of $300,000. The firm's fixed operating costs total $75,000 and its...

Wandel Inc. has forecasted sales of $300,000. The firm's fixed operating costs total $75,000 and its variable operating costs are equal to 70% of this sales level. The company needs to pay $12,000 in interest each period. Its tax rate is 40% and it has 10,000 shares. a) Compute the earnings before interest and taxes (EBIT) for a sales level of $300,000 b) Compute Earnings after taxes and compute the EPS for that sales level.

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...

Print-O-Matic printing company spends specific amounts on fixed costs every month. The costs of those fixed...

Print-O-Matic printing company spends specific amounts on fixed costs every month. The costs of those fixed costs are in table #3.1.12. a.) Find the mean and median. For median, list the numbers in order and show calculation. For mean, show calculation along with the sum. b.) Find the mean and median with the bank charges removed. Describe what happened and why? Show calculation. c.) Find the variance and standard deviation by creating a standard deviation table. Show work. d.) Discuss...

An airline manufacturer incurred the following costs last month (in thousands of dollars):

An airline manufacturer incurred the following costs last month (in thousands of dollars): Requirement 1. Assuming the cost object is an airplane, classify each cost as one of the following: direct material (DM), direct labor (DL), indirect labor (IL), indirect materials (IM), other manufacturing overhead (other MOH), or period cost. What is the total for each type of cost? (Enter currency amounts in thousands and not in dollars. If a box is not used in the table leave the box...

A gift shop expects to sell 400wind chimes during the next year. It costs $1.20 to...

A gift shop expects to sell 400wind chimes during the next year. It costs $1.20 to store one wind chime for one year. There is a fixed cost of $⁢15 for each order. Find the lot size and the number of orders per year that will minimize inventory costs.

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...

Subjects