Posted: May 4th, 2016

How many units must be sold in order to obtain a before-tax profit of $12,000?

2. Baker Company sells its product for $60. In addition, it has a variable cost ratio of 40 percent and total fixed costs of $9,000. How many units must be sold in order to obtain a before-tax profit of $12,000?
a. 350 units
b. 584 units
c. 875 units
d. 333 units

3. Lewis Production Company had the following projected information for 2006:

Selling price per unit $150
Variable cost per unit $90
Total fixed costs $300,000

What is the break-even point in units?
a. 2,000 units
b. 5,000 units
c. 3,333 units
d. 60,000 units

4. Assume the following cost behavior data for Portrait Company:

Sales price $18.00 per unit
Variable costs $13.50 per unit
Fixed costs $22,500
Tax rate 40%

What volume of sales dollars is required to earn a before-tax income of $27,000?
a. $198,000
b. $180,000
c. $90,000
d. $270,000

5. Assume the following cost behavior data for Portrait Company:

Sales price $18.00 per unit
Variable costs $13.50 per unit
Fixed costs $22,500
Tax rate 40%

What volume of sales dollars is required to earn an after-tax income of $40,500?
a. $360,000
b. $90,000
c. $252,000
d. $495,000

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