Hunter & Sons sells a single model of meat smoker for use in the home. The smoke

Question

Hunter & Sons sells a single model of meat smoker for use in the home. The smokers have the following price and cost characteristics Sales price Variable costs Fixed costs S 83 per smoker 32 per smoker Hunter & Sons is subject to an income tax rate of 40 percent Required: a. How many smokers must Hunter & Sons sell every month to break even? Answer is not complete. sales in units b. How many smokers must Hunter&Sons; sell to earn a monthly operating profit of $119,340 after taxes? Answer is not complete. Number of units

Explanation / Answer

Sales price 83 less variable cost per unit -32 contribution margin 51 a) Break even sale in units = fixed cost/contribution per unit 362100/51 7100 units b) number of units sold -= (362100+119340)/51 9440 2) Chicken fish Sales price 3.8 5.1 less variable cost per unit -1.9 -2.55 contribution margin 1.9 2.55 weighted conribution margin = 1.9*43%+2.55*57% 2.2705 profit total contribution margin 393300 757350 1150650 less:fixed cost -119000 profit 1031650 BEP(units) = 119000/2.2705 52411.36 Chicke 22537 tacos fish 29874 tacos

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