Termecula Inc. sells a component for 75 dollars per unit. Fixed costs total 1,20

Question

Termecula Inc. sells a component for 75 dollars per unit. Fixed costs total 1,200 dollars and variable costs are 60 dollars per unit. Calculate the number of units that the company must sell if it desires to breakeven. Calculate the amount of sales revenue that the company must sell if it desires a 300 dollars profit Compute sales revenues if the company targets a profit margin of 10 percent Assume Temecula has a 30 percent income tax rate. Determine sales revenue if the firm targets 630 dollars of net income. ignoring income taxes, Temecula currently earns 300 dollars profit by selling 100 units. The firm determine that it can be lower variable cost to 50 dollars per unit (from 60 dollars) if it is willing to incur an additional 800 dollars in fixed costs. Should Temecula change its cost structure? A firm has 1,000,000 in its common stock amount and 2,500,000 in its paid in capital account. The firm issued 500,000 share of common stock. There has only been one stock issue.

Explanation / Answer

Termecula Inc. sells a component for 75 dollars per unit. Fixed costs total 1,20

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