(CVP) Seattle Leisure Designs has designed a new athletic suit. The company plans to produce and sell 30,000 units of the new product in the coming year. Annual fixed costs are $600,000, and variable costs are 70 percent of selling price. If the company wants a pre tax profit of $300,000, at what minimum price must it sell its product?
(CVP) Sheridan Shacks makes portable garden sheds that sell for $1,800 each. Costs are as follows:
|
Per Unit |
Total |
|
|
Direct material |
$800 |
|
|
Direct labor |
90 |
|
|
Variable production overhead |
60 |
|
|
Variable selling and administrative cost |
50 |
|
|
Fixed production overhead |
|
$200,000 |
|
Fixed selling and administrative |
|
60,000 |
a. How many garden sheds must the company sell to break even?
b. If Sheridan Shacks’ management wants to earn a pre tax profit of $200,000, how many garden sheds must it sell?
c. If Sheridan Shacks’ management wants to earn a pre tax profit of $280,000, how many garden sheds must it sell?