Essay
Techno Inc manufactures pagers that sell for $130 each.Annual fixed costs total $3,185,000 while variable costs are $39 per unit.The company is subject to a 32% corporate tax and wants to earn an after-tax profit of $675,000.
(a)What is the contribution margin ratio?
(b)What is the breakeven point in sales dollars?
(c)How many pagers must the company sell to reach its after-tax profit goal?
(d)If Techno increased the selling price of the fax machine by 10%,what would the breakeven point in units be?
Correct Answer:
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(a)$130 - $31 = $91 $91/$130 = .70 contr...View Answer
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