Ch 09 Templates

# Ch 09 Templates - Example 1 Suppose Flya Kite Company sells...

This preview shows pages 1–3. Sign up to view the full content.

Example 1 Sales Price per Unit Minus: Variable Cost per Unit Contribution Margin per Unit Total Fixed Cost Divided By CM per Unit Units Needed to Breakeven Units Needed to Breakeven Multipled by Price per Unit Revenue Needed to Breakeven Total Fixed Cost Plus: Desired Profit Befor Tax Sum of FC and Desired Profit Divided by CM per Unit Units Needed for Desired Profit Profit After Tax Divided by (1 - Tax Rate) Profit Before Tax Plus: Fixed Cost Sum of FC and Desired Profit Divided by CM per Unit Units Needed for Desired Profit Suppose Flya Kite Company sells kites for \$ 15 each. The kites have a variable cost per unit of \$ 7. The company has \$ 80,000 in fixed cost. (1) Approximately how many kites would Flya Kite have to sell to break even? (2) Approximately how many kites would the company have to sell to make a before tax profit of \$ 75,000? (3) However, since the tax man cometh with a tax rate of 35% of before tax profit, approximately how many kites would Flya Kite have to sell to make a profit after tax of \$ 75,000?

This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document
Example 2 First: Find the Sales Mix Percentage Total Units Rented per Year Divided by Total Sales Mix Percentage Second: Find the Weighted Average Contribution Margin Tents RV Total Sales Price per Unit Minus: Variable Cost per Unit Contribution Margin per Unit Multipled by Sales Mix % Weighted Average CM Third: Find the Total Units Needed to Breakeven Total Fixed Cost Divided By Weighted Average CM Total Units Needed to Breakeven Fourth: Find the Units of Each Product Needed to Breakeven and the Total Revenue Needed to Breakeven Tents RV Total Total Units Needed to Breakeven Multipled by Sales Mix % Units of Each Product Multipled by Price per Unit Revenue Needed to Breakeven Part B: Total Units Needed to Make Desired Profit Before Tax Total Fixed Cost Plus: Desired Profit Befor Tax Sum of FC and Desired Profit Divided By Weighted Average CM Total Units Needed for Desired PBT Units and Revenue for Each Product to make Desired PBT Tents RVs Total Total Units Needed for Desired PBT Multiplied by Sales Mix Units of Each Product Multiplied by Price per unit Revenue needed to reach desired PBT \$54,000 \$202,500 \$256,500 Part C: Total Units Needed to Make Desired Profit After Tax Desired Profit After Tax Divided by (1 - Tax Rate) Profit Before Tax needed Plus: Fixed Cost Sum of FC and Desired Profit Divided By Weighted Average CM Total Units Needed for Desired Profit Units and Revenue for Each Product to make Desired PBT Tents RVs Total Total Units Needed for Desired PAT Multiplied by Sales Mix Units of Each Product Multiplied by Price per unit Revenue needed to reach desired PAT \$73,231 \$274,615 \$347,846 Tent Spaces RV Spaces Suppose Dual park rents both tent spaces and RV spaces. Tent spaces rent for \$6 and have a variable cost of \$3 per night. RV spaces rent for \$15 and have a variable cost of \$7 per night. Total Fixed Costs are \$60,000. The park usually rents 6,000 tent spaces and 9,000 RV spaces per year. (A) What is the total tent rentals and RV rentals and the total revenue needed for the park to
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

### Page1 / 24

Ch 09 Templates - Example 1 Suppose Flya Kite Company sells...

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document
Ask a homework question - tutors are online