THREE-PRODUCTS COMPANY MAKES AND SELLS THREE PRODUCTS: TABLES, CHAIRS, AND SHELVES. FOR EACH TABLE SOLD, THEY...

THREE-PRODUCTS COMPANY MAKES AND SELLS THREE PRODUCTS: TABLES, CHAIRS, AND SHELVES. FOR EACH TABLE SOLD, THEY SELL 6 CHAIRS AND 3 SHELVES. SELLING PRICES FOR TABLES, CHAIRS, & SHELVES ARE $50, $10, AND $15, RESPECTIVELY; WHILE THE VARIABLE COSTS ARE $40, $5, AND $7, RESPECTIVELY. THE TOTAL FIXED COSTS ARE $12,800.

1. CALCULATE THE BREAK-EVEN IN UNITS AND SALES-DOLLARS.

2. IF THE TAX-RATE IS 30% AND THE DESIRED AFTER-TAX PROFIT IS $4,480, WHAT IS THE TARGET SALES IN UNITS AND SALES-DOLLARS?

3. WHAT IS THE MARGIN OF SAFETY (MOS) IN SALES DOLLARS?

PLEASE SHOW ALL WORK AND EQUATIONS USED

Solutions

Expert Solution

Break Even Sales are amount of sales where company is at no profit or loss, Revenue earned is equal to sum of Fixed Cost and Variable Cost.

Calculation is as below:

ekkarill92 answered 11 months ago

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