The Following Information Describes a Product Expected to Be Produced

question 39

Essay

The following information describes a product expected to be produced and sold by Hadley Company:
Selling price $80 per unit
Variable costs $32 per unit
Total fixed costs $630,000
Required:
(a)Calculate the contribution margin ratio.
(b)Calculate the break-even point in dollar sales.
(c)What dollar amount of sales would be necessary to achieve a pretax income of $120,000?

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Definitions:

Resale Price

The price at which an item is sold after it has already been purchased from the original seller or manufacturer.

Contract Price

The price agreed upon by the contracting parties for the exchange of goods, services, or property as stipulated in their contract.

Punitive Nature

An aspect of legal judgments or actions intended to punish the wrongdoer, rather than simply to compensate for harm done.

UCC

Uniform Commercial Code, a standardized set of business and commercial laws that facilitate the fair conduct of transactions and dealings across state lines.