Accounting Help

[OutlawEX]

Ok I cant figure out how to do and solve these 3 questions. Can someone please help me

#1
CM of $32 per unit.
Presently selling 90,000 units and earning 240,000 after tax income. Taxes are $80,000 at 25% tax rate. If firm increases its after tax income to $300,000,how many more units must it sell?

#2
Alternative 1 Alternative 2
Variable cost per unit $8 $12
Fixed Cost $240,000 $140,000
Selling price perUnit $20 $20
If company expected sales volume is 35,000 units ,which alternative should be selected?
#3
Company reports following info. Units sold 1200,Unit sale price $30, unit variable cost $10, Total fixed cost $18000.
• Calculate pretax income
• Calculate degree of operating leverage

#4 Info of product expected to be produced and sold
Selling price $32 per unit
Variable cost $27 per unit
Total fixed Cost $850,000 per year
• Calculate CM per unit?
• Calculate BEU?

[derekhonda]

These questions aren't that hard, your teacher is just ****ing up the language to make it more difficult.

Question number 1 essentially says.

You sell 90,000 units. Your profit is 320,000. You then have to pay back 25% of the profit for taxes (80,000). So you are left with 240,000 after tax profit. How many more do you have to sell to have an after tax profit of 300,000?

I have a roundabout way of doing things, but you need to make 400k to have a 300k after tax profit. This is increasing your 90,000 units by 1.2. (don't have a calculater on me) For bonus points, tell your teacher this is of course assuming you receive no more price breaks for an increase in order volume or that you have not entered into a higher taxable bracket.

All of these can be done very easily using the break even formula and then back dooring your way into the problem

Breakeven Point = Fixed Costs/(Unit Selling Price - Variable Costs)