Nature’s Own makes three types of wood flooring: Oak, Hickory, and Cherry. The company’s tax rate is 40 percent. The following costs are expected for the year: (See attached) Per-square-yard expected selling prices are as follows: Oak, $32.80; Hickory, $16.00; and Cherry, $50.00. The expected sales mix is as follows: Oak Hickory Cherry Square yards 10,800 86,400 7,200 d. If the company wants to earn an after-tax profit of $816,000, determine the revenue needed using the contribution margin percentage approach. $______ e. If the company achieves the revenue determined in (d), what is the (1) breakeven point in dollars, and the margin of safety (2) in dollars and (3) as a percentage Breakeven in dollars: $______ Margin of safety in dollars: $______ Margin of safety percentage: $______

Nature’s Own makes three types of wood flooring: Oak, Hickory, and Cherry. The company’s tax rate is 40 percent. The following costs are expected for the year: (See attached) Per-square-yard expected selling prices are as follows: Oak, $32.80; Hickory, $16.00; and Cherry, $50.00. The expected sales mix is as follows: Oak Hickory Cherry Square yards 10,800 86,400 7,200 d. If the company wants to earn an after-tax profit of $816,000, determine the revenue needed using the contribution margin percentage approach. $ e. If the company achieves the revenue determined in (d), what is the (1) breakeven point in dollars, and the margin of safety (2) in dollars and (3) as a percentage Breakeven in dollars: $ Margin of safety in dollars: $ Margin of safety percentage: $

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter5: Process Costing

Section: Chapter Questions

Problem 10MC: Direct material costs $3 per unit, direct labor costs $5 per unit, and overhead is applied at the...

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