The Evans Company uses an ABC system and has provided the following information:
Other data:
Total fixed costs (ABC) £135,000
Unit selling price ) £30
Required:

a.
Determine the break-even point in units.
b.
Determine the number of units that must be sold to earn £90,000 in profit before taxes.
c.
Determine the number of units that must be sold to generate an after-tax profit of £36,000 if there is a 40 percent tax rate.

Question

The Evans Company uses an ABC system and has provided the following information:
Other data:
Total fixed costs (ABC) £135,000
Unit selling price ) £30
Required:
  
a.
Determine the break-even point in units.
b.
Determine the number of units that must be sold to earn £90,000 in profit before taxes.
c.
Determine the number of units that must be sold to generate an after-tax profit of £36,000 if there is a 40 percent tax rate.

Quizplus · Accepted Answer

The Answer of The Evans Company uses an ABC system and has provided the following information:
Other data:
Total fixed costs (ABC) £135,000
Unit selling price ) £30
Required:
  
a.
Determine the break-even point in units.
b.
Determine the number of units that must be sold to earn £90,000 in profit before taxes.
c.
Determine the number of units that must be sold to generate an after-tax profit of £36,000 if there is a 40 percent tax rate.

The Evans Company Uses an ABC System and Has Provided