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J & C Stacy Enterprises is expecting to earn a profit of $180,000 in 20xx. The company manufactures wrought iron lamps. Each lamp requires variable costs of $13 for direct materials, $9 for direct labor, and $12 for overhead. Total variable costs are thus $34 per lamp. Fixed costs for 20xx are expected to be $630,000. Each lamp will sell for $79.
a. Determine how many lamps the company must sell to earn its targeted profit, and convert this amount to sales dollars.
b. Compute breakeven sales in dollars.
c. Explain the dollar difference between breakeven sales dollars and the sales dollars necessary to earn the targeted profit. Use the contribution margin as part of your explanation.
Corporate Citizenship
The behavior of a company viewed in terms of its contribution to society through its ethical business practices and social responsibility initiatives.
UN Global Compact
A United Nations initiative to encourage businesses worldwide to adopt sustainable and socially responsible policies.
Procedural Justice
The fairness perceived in the processes and methods used to make decisions and resolve disputes.
Interpersonal Treatment
The manner in which individuals interact with and regard one another within personal and professional relationships.
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