JRT, Inc., predicts the following unit costs of making and selling its single pr

Question

JRT, Inc., predicts the following unit costs of making and selling its single product at a volume of 6,000 units per month (72,000 per year) Total Costs Cost Per Unit Manufacturing costs $20 10 Materials (variable) Labor (variable) Variable overhead Fixed overhead Selling and administrative expenses: 7 Variable Fixed Total: JRT's income tax rate is 40%, and it sells its product for $75 per unit. Required: a. Determine JRTs monthly break-even point b. The number of units JRT would have to sell to earn a monthly net income (after-tax) of $77,400. c. The dollar amount of sales JRT would need to make to earn a monthly net income of $32,400

Explanation / Answer

Fixed cost = 6000*(6+10) = 96000

Variable cost per unit = 20 + 10 + 8 + 7 = 45

a)

breakeven point = 96000 / (75 - 45) = 3200

b)

Profit = (1-tax rate) * ( sales - VC - Fixed cost)

77400 = (1-40%)*(X*(75 - 45) - 96000)

77400 = 18*X - 57600

X = (77400 + 57600) /18

X = 7500

c)

32400 = (1-40%)*(X*(75 - 45) - 96000)

32400 = 18*X - 57600

X = (32400 + 57600) /18

X = 5000

Sales = 5000 * 75 = 375000

Related Questions

Navigate

• Browse (All)
• Browse J
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.