Solution-What increase in selling price would need to occur

What increase in selling price would need to occur to cover

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Reference no: EM132974468

Wally's Wheelbarrows, Inc. has provided the following cost data for the last year when 180,000 wheelbarrows were produced and sold.

Raw materials 18.40
Direct labor 22.00
Manufacturing overhead 7.60

Fixed costs are $450,000. The sales price was $64 per wheelbarrow. The company's tax rate is 40%.

Problem 1: How many units must be sold to meet an after-tax income of $500,000?

Problem 2: What would be the operating income (pre-tax) from selling 75,000 wheelbarrows?

Problem 3: What would be the operating income (pre-tax) from selling 75,000 wheelbarrows if the fixed costs increase by 15%?

Problem 4: What would be the operating income (pre-tax) from selling 75,000 wheelbarrows if instead the selling price increases by 10%?

Problem 5: What increase in selling price would need to occur to cover the 15% increase in fixed costs but still earn 500,000 after tax

Reference no: EM132974468

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What increase in selling price would need to occur to cover

Reference no: EM132974468

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