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Fundamentals of Cost Accounting 2nd Edition by William Lanen, Carolyn Wells, Michael Maher
Edition 2ISBN: 978-0077274993Fundamentals of Cost Accounting 2nd Edition by William Lanen, Carolyn Wells, Michael Maher
Edition 2ISBN: 978-0077274993 Exercise 9
Extensions of the Basic CVP Model-Taxes
Action Games has developed a new computer game that it plans to sell for $32. The variable costs associated with each game (for materials, shipping, and packaging) amount to $7. The fixed costs associated with the game amount to $75,000 per year.
Required
a. Compute the break-even point in units for the game.
b. Assuming that the tax rate is 40 percent and the desired profit level is $120,000 after tax, compute the required unit sales level.
Action Games has developed a new computer game that it plans to sell for $32. The variable costs associated with each game (for materials, shipping, and packaging) amount to $7. The fixed costs associated with the game amount to $75,000 per year.
Required
a. Compute the break-even point in units for the game.
b. Assuming that the tax rate is 40 percent and the desired profit level is $120,000 after tax, compute the required unit sales level.
Explanation
Verified
Verified
a.
Break-even point (in units)Break-even...
Fundamentals of Cost Accounting 2nd Edition by William Lanen, Carolyn Wells, Michael Maher
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