Samuelson, Inc., has just purchased a $625,000 machine to produce calculators. T

Question

Samuelson, Inc., has just purchased a $625,000 machine to produce calculators. The machine will be fully depreciated by the straight-line method over its economic life of five years and will produce 37,000 calculators each year. The variable production cost per calculator is $11, and total fixed costs are $860,000 per year. The corporate tax rate for the company is 38 percent. For the firm to break even in terms of accounting profit, how much should the firm charge per calculator? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Break-even price $ ?

Explanation / Answer

Accounting Break even Price

Accounting break even point

(Total fixed cost / Production unit volume) + Variable cost per unit

(860000/37000)+11

34.24

Accounting Break even Price

Accounting break even point

(Total fixed cost / Production unit volume) + Variable cost per unit

(860000/37000)+11

34.24

Related Questions

Navigate

• Browse (All)
• Browse S
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.