Hamlet House 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 Hamlet House’s management wants to earn a pre-tax profit of $200,000, how many garden sheds must be sold? c. If Hamlet House’s management wants to earn a pre-tax profit of $280,000, how many garden sheds must be sold?

Hamlet House 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 Hamlet House’s management wants to earn a pre-tax profit of $200,000, how many garden sheds must be sold? c. If Hamlet House’s management wants to earn a pre-tax profit of $280,000, how many garden sheds must be sold?

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter16: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 8E

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	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

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