Munoz Company makes a product that sells for $31 per unit. The company pays $20 per unit for the variable costs of th incurs annual fixed costs of $107,800. Munoz expects to sell 21,700 units of product. Required Determine Munoz's margin of safety expressed as a percentage. (Round your percentage answers to 2 decimal place should be entered as 23.45).) Margin of safety

Munoz Company makes a product that sells for $31 per unit. The company pays $20 per unit for the variable costs of th incurs annual fixed costs of $107,800. Munoz expects to sell 21,700 units of product. Required Determine Munoz's margin of safety expressed as a percentage. (Round your percentage answers to 2 decimal place should be entered as 23.45).) Margin of safety

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter6: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 3BE

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Olivian Company wants to earn 420,000 in net (after-tax) income next year. Its product is priced at 275 per unit. Product costs include: Variable selling expense is 14 per unit; fixed selling and administrative expense totals 290,000. Olivian has a tax rate of 40 percent. Required: 1. Calculate the before-tax profit needed to achieve an after-tax target of 420,000. 2. Calculate the number of units that will yield operating income calculated in Requirement 1 above. (Round to the nearest unit.) 3. Prepare an income statement for Olivian Company for the coming year based on the number of units computed in Requirement 2. 4. What if Olivian had a 35 percent tax rate? Would the units sold to reach a 420,000 target net income be higher or lower than the units calculated in Requirement 3? Calculate the number of units needed at the new tax rate. (Round dollar amounts to the nearest dollar and unit amounts to the nearest unit.)
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