How many phones must Cellular Galaxy sell during a given period

QUESTION 1

How many phones must Cellular Galaxy sell during a given period to break even given the following cost and price data:

Sales Price

$199.00

Variable Costs

$31.00

Fixed Costs

$25,000.00

Depreciation

$5,000.00

Tax Rate

36%

QUESTION 2

How many TV’s must Electronics World sell during a given period to break even given the following cost and price data:

Sales Price

$800.00

Variable Costs

$250.00

Fixed Costs

$50,000.00

Depreciation

$15,000.00

Tax Rate

36%

QUESTION 3

How many games must Game Center sell during a given period to break even given the following cost and price data:

Sales Price

$35.00

Variable Costs

$11.00

Fixed Costs

$15,000.00

Depreciation

$5,000.00

Tax Rate

36%

QUESTION 4

The selling price, variable costs, annual fixed costs, annual depreciation charges, and  marginal tax rate for the project are shown below.  Calculate the accounting breakeven quantity per year.

Sales Price

$6.99

Variable Costs

$2.60

Fixed Costs

$20,000.00

Depreciation

$5,000.00

Tax Rate

35%

QUESTION 5

How many computers must PC World sell during a given period to break even given the following cost and price data:

Sales Price

$2,200.00

Variable Costs

$1,6 00.00

Fixed Costs

$75,000.00

Depreciation

$10,000.00

Tax Rate

36%

QUESTION 6

The selling price, variable costs, annual fixed costs, annual depreciation charges, and  marginal tax rate for the project are shown below.  If sales are equal to 600 units, what is the after tax profit amount?

Sales Price

$98.00

Variable Costs

$42.00

Fixed Costs

$20,000.00

Depreciation

$8,000.00

Tax Rate

35%

QUESTION 7

A mesquite farmer wants you to invest in his mesquite harvesting business.  He sells mesquite wood to several “Texas-style” steakhouses that serve authentic “Mesquite-smoked” steaks.  He promises to give you all profits for 5 years after covering operating costs and his salary and taxes each year.   Your analysis of his operation revealed the following cost and price data.

Selling price per cord of mesquite

$72.00

Variable costs (per cord)

$40.00

Fixed Costs (per year)

$400,000.00

Depreciation (per year)

$30,000.00

Salary

$50,000.00

Tax Rate

25%

Based on this information, How many cords of mesquite wood must be harvested and sold the first year before there is any profit available to you? (Remember to include the farmer’s salary in your costs that must be covered.)

QUESTION 8

A watermelon farmer wants you to invest in his watermelon business.  He sells watermelons to several roadside “farmer’s markets” every week.  He promises to give you all profits for 5 years after covering operating costs and his salary and taxes each year.   Your analysis of his operation revealed the following cost and price data.

Selling price per watermelon

$6.00

Variable costs (per melon)

$1.30

Fixed Costs (per year)

$30,000.00

Depreciation (per year)

$6,000.00

Salary

$40,000.00

Tax Rate

25%

Based on this data, how many watermelons must be harvested and sold the first year before there is any profit available to you?

QUESTION 9

A mesquite farmer wants you to invest in his mesquite harvesting business.  He sells mesquite wood to several “Texas-style” steakhouses that serve authentic “Mesquite-smoked” steaks.  He promises to give you all profits for 5 years after covering operating costs and his salary and taxes each year.   Your analysis of his operation revealed the following cost and price data.

Selling price per cord of mesquite

$72.00

Variable costs (per cord)

$40.00

Fixed Costs (per year)

$400,000.00

Depreciation (per year)

$30,000.00

Salary

$50,000.00

Tax Rate

25%

Based on these data, how much profit will you receive if he sells 18,000 cords?

QUESTION 10

A watermelon farmer wants you to invest in his watermelon business.  He sells watermelons to several roadside “farmer’s markets” every week.  He promises to give you all profits for 5 years after covering operating costs and his salary and taxes each year.   Your analysis of his operation revealed the following cost and price data.

Selling price per watermelon

$6.00

Variable costs (per melon)

$1.30

Fixed Costs (per year)

$30,000.00

Depreciation (per year)

$6,000.00

Salary

$40,000.00

Tax Rate

25%

Based on these data, how much profit will you receive if he sells 20,000 melons?

Here’s the SOLUTION

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