Cirele the better of the best answen inginfomation pertains to Tiller Co Sales V
ID: 2339990 • Letter: C
Question
Cirele the better of the best answen inginfomation pertains to Tiller Co Sales Variable s 800,000 160,000 0,000 What is Tiller's break-even point in sales dollars? (CPA adapted) D $40,000 - vcan Coporation manufactures and sells T-shirts imprinted with college names and slagans. Last year, the shirts sold for $7.50 each, and the variable cost to manufacture them was $2.28 per unit. The company needed to sell 20,000 shirts to break-even. The after tax net income last year was $5,040 Donnelly's expectations for the coming year include the following . The sales price of the T-shirts will be S9 Variable cost to manufacture will increase by one-third Fixed costs will increase by 10% The income tax rate of 40% will be unchanged. Based on a $10 selling price per unit and if Dorcan Corporation wishes to earn $37,800 in after tax net income for the coming year, the company's sales volume in dollars must be: Ans A. $213,750 B. $257,625 C $207.000 D. $255,000 In the cost equation TC-F+VX, X is best described as the: Ans. A.costs that do not vary with changes in the activity level. B. costs that do vary with changes in the activity level. C. total cost estimate at a particular activity level. D. activity level used to estimate the total cost. 10 In the standard regression equation of y atbx, the letter y is best described as the: Ans. A. independent variable. B. dependent variable C. slope of the equation. of the equation. Page 8 of 1Explanation / Answer
1 Sales 800000 A Less: Variable Cost 160000 Contribution Margin 640000 B Contribution Margin Ratio 80.00% B/A Break Even Point: Fixed Cost 40000 A Contribution Margin Ratio 80% B Break Even Point 50000 A/B C 2 Last Year Coming Year Sales Price 7.50 10.00 Less Variable Cost 2.25 3.00 Increase by 1/3 A Contribution Margin 5.25 7.00 B Break Even Point 20000 - A*B Fixed Cost 105000 115500 110% Desired Income After Tax 37800 Desired Income Before Tax 63000 Fixed Cost 115500 A Required Contribution Margin 178500 B Contribution Margin 7.00 A/B Units 25500 Selling Price 10 Sales Revenue 255000 D 3 X Denotes the Activity Level Used to Estimate the total Cost D 4 Y is the Intercept D