help with homework
Posted in the Accounting Forum
#1 Jun 24, 2011
I am hoping someone could help me with a couple problems from accounting homework, maybe there is a better way to calculate these then what I have been taught because I can not come up with anything!
1. Lockwood Company currently sells its deadbolt locks for $30 each. The locks have a variable cost of $10, and the company's annual fixed costs are $150,000. The company's tax rate is 40 percent.
Calculate the number of locks that must be sold to earn an after-tax profit of $24,000.
2.Hacker Aggregates mines and distributes various types of rocks. Most of the company's rock is sold to contractors who use the product in highway construction projects. Treva Hacker, company president, believes that the company needs to advertise to increase sales. She has proposed a plan to the other managers that Hacker Aggregates spend $100,000 on a targeted advertising campaign. The company currently sells 25,000 tons of aggregate for total revenue of $5,000,000. Other data related to the company's production and operational costs follow:
Direct Labor 1,500,000
Variable Production Overhead 200,000
Fixed production Overhead 350,000
Selling and administrative expenses
a. Compute the break-even point in units (i.e., tons) for Hacker Aggregates.
b. Compute the contribution margin ratio for Hacker Aggregates. Enter as a decimal and round to 2 places.
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