You Have Been Provided with the Following Information Regarding the Closure

question 14

Essay

You have been provided with the following information regarding the Closure Manufacturing Company:
$\begin{array}{llr} \text {Sales price } &\$50\\ \text { Variable manufacturing cost per unit } &24\\ \text { Variable marketing cost per unit} &12\\ \text { Fixed manufacturing costs } &6\\ \text { Fixed administrative costs} &3\\\end{array}$



This information is based on forecasted sales of 33,000 units.
Required:
(a) What is the expected operating profit for the upcoming year?
(b) What is the break-even point in dollars?
(c) How much in sales dollars is required to generate an operating profit of $275,000?

---

Definitions:

Widely Held Company

A corporation whose ownership is distributed over a large number of people with no single individual or group having a significant proportion.

Stockholders

Owners of shares in a company and thus, hold equity interest, enjoying benefits like dividends and voting rights.

Return On Preferred Stock

The dividend paid on preferred stock divided by the price of the preferred stock, representing the earnings returned on investments in preferred shares.

Stock Decreases

A decrease in the market price of a company's shares.