QUESTION 14Red Hot Fire Company, a producer of red-hot salsa, has the following information:Income tax rate30%Selling price per unitVariable cost per unit$5.00$3.50Total fixed costs$90,000.00must be sold to obtain a targeted income before taxes of $30,000.O 10,000 unitsO27,000 unitsO 45,000 unitsU 80,000 units

Introduction:- Cost-Volume-Profit Analysis also known as Break-Even Analysis. It is used to find…

Red Hot Fire Company, a producer of red-hot salsa, has the following information: Income tax rate 30% Selling price per unit $5.00 Variable cost per unit $3.50 Total fixed costs $90,000.00 must be sold to obtain a targeted income before taxes of $30,000. Q10,000 units O 27,000 units O 45,000 units O 80099 units

Red Hot Fire Company, a producer of red-hot salsa, has the following information: Income tax rate 30% Selling price per unit $5.00 Variable cost per unit $3.50 Total fixed costs $90,000.00 must be sold to obtain a targeted income before taxes of $30,000. Q10,000 units O 27,000 units O 45,000 units O 80099 units

Accounting

27th Edition

ISBN:9781337272094

Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.

Publisher:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.

Chapter21: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 21.17EX

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Question 11Company L sells a product in two models. The basic model has a contribution margin per unit of $80 and the deluxe model has has a contribution margin per unit of $100. Its typical sales mix is 60% basic models and 40% deluxe models. Total fixed costs for the year are $88,000. How many basic and deluxe units must Company L sell to make a profit of $66,000? Basic model: 1,140 units; deluxe model: 760 units Basic model: 1,050 units; deluxe model: 700 units Basic model: 700 units; deluxe model: 1050 units Basic model: 760 units; deluxe model: 1,140 units
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