Firm M expects to earn $210,000 next year after taxes. Sales will be $4 million. This firm makes combined bookshelf and desk unit for college students. This units sell for $200 each and have a variable cost of $150 per unit. This firm pays 30 percent tax rate on its earnings. Based on the information provided, estimate the firm’s fixed costs expected next year and estimate the firm’s break-even point in units and dollars.

Firm M expects to earn $210,000 next year after taxes. Sales will be $4 million. This firm makes combined bookshelf and desk unit for college students. This units sell for $200 each and have a variable cost of $150 per unit. This firm pays 30 percent tax rate on its earnings. Based on the information provided, estimate the firm’s fixed costs expected next year and estimate the firm’s break-even point in units and dollars.

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter18: The Management Of Accounts Receivable And Inventories

Section: Chapter Questions

Problem 10P

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