Question

9. We have a food service operation selling NY steak. The COGS per steak is $10 Other VC per steak is $6 Average selling price per NY steak is $40. FC is $60,000. Tax rate is 30% a. How much revenue will the café-mako if 2,000 NY steaks are sold? b. What is the total variable cost per unit? C. What is the contribution margin per unit? d. What is the total contribution margin-when-2000 otoako Oro solo t. What is the contribution margin ratio? f. How many units must be sold to achieve breakeven? g. If we want to have pretax profit of $14,000, how many steaks do we need to sell? h. What is the revenue required (BEP) to achieve pretax profit of $14,000? i. If we want to earn net income of $35,000, how many steaks must be sold?

Answer 1

f)_Contribution per unit selling price - COGS - other ve $40 - $10 - $6 $24.4 No. of units to be sold to achieve break even fixed cost Contribution per unit $ 60,000 نادرا نے ان $24 or $24 22,500 units 9) To have a pre tax profit of $14,000, number of steaks we need to sell Desined pre-fax profit. I fixed cost Contribution unit per $14.000 + $ 60,000 $24 = $_74,000 $ 24 - 3.083.33 : 3,084 units (Roursled to next integer) . 1) Revenue required to achieve pretax profit of $14,000 3,084 units X $40 =_$123,360

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Given tax-rate : 30% Post tax income se, net income_ $_35,000 Therefore, pre-tax income 35,000_X_100 70 $ 50,000 To have a pretax profit of $50.000_[se, net income of $ 35,000), number of steaks to be sold 50,000+ 60,000 24 24,583.33 4,584_steaks Crounded off to next integer) Notes Rounding off is done because we cannot sell_0:33_steak. It has been founded off to Dexł integer because Younding off to lower sicle would result in lower income and criteria will not be met. I hope_I've solved to the point. Please feel free to ask any queries and do give a thumbsup if the solution was satisfactory - Thank you