Boron Company will produce 2,500 boxes of batteries next year. Variable costs is 60% of sales, while fixed costs will total P80,000 on which half is attributable to manufacturing and the rest to financing cost. What is the sales price of the per box of batteries if Boron Company wants to achieve a degree of operating leverage of 1.67 and an earnings before taxes equal to half the amount of interest expense?

Boron Company will produce 2,500 boxes of batteries next year. Variable costs is 60% of sales, while fixed costs will total P80,000 on which half is attributable to manufacturing and the rest to financing cost. What is the sales price of the per box of batteries if Boron Company wants to achieve a degree of operating leverage of 1.67 and an earnings before taxes equal to half the amount of interest expense?

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter16: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 10E: Schylar Pharmaceuticals, Inc., plans to sell 130,000 units of antibiotic at an average price of 22...

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Schylar Pharmaceuticals, Inc., plans to sell 130,000 units of antibiotic at an average price of 22 each in the coming year. Total variable costs equal 1,086,800. Total fixed costs equal 8,000,000. (Round all ratios to four significant digits, and round all dollar amounts to the nearest dollar.) Required: 1. What is the contribution margin per unit? What is the contribution margin ratio? 2. Calculate the sales revenue needed to break even. 3. Calculate the sales revenue needed to achieve a target profit of 245,000. 4. What if the average price per unit increased to 23.50? Recalculate: a. Contribution margin per unit b. Contribution margin ratio (rounded to four decimal places) c. Sales revenue needed to break even d. Sales revenue needed to achieve a target profit of 245,000
AZ Humanade, Inc. expects to earn P150,000 next year after taxes on sales of P2,200,000. Stanley manufactures only one product. The firm’s selling price is P8 a piece and with a variable cost of P2.40 a piece. Tax Rate is currently at 34%. REQUIRED: What are the firm’s expected fixed costs for next year? What is the breakeven point in units?
The National Inc. will produce 5,000 boxes of chocolates next year. Variable costs is 60% of sales, while fixed costs will total P160,000 on which half is manufacturing fixed cost and the rest to financing cost. What is the per box of chocolate sales price if National Inc. wants to achieve a degree of operating leverage of 1.67 and an earnings before taxes equal to 50% of the amount of interest expense? a. 155 b. 200 c. 225 d. 100
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The National Inc. will produce 5,000 boxes of chocolates next year. Variable costs is 60% of sales, while fixed costs will total P160,000 on which half is manufacturing fixed cost and the rest to financing cost. What is the per box of chocolate sales price if National Inc. wants to achieve a degree of operating leverage of 1.67 and an earnings before taxes equal to 50% of the amount of interest expense?
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