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Black Panther Corporation sells a single product for $50. Its management estimates the following revenues...

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Accounting

Black Panther Corporation sells a single product for $50. Its management estimates the following revenues and costs for the year 2018:

Net Sales $500,000
Direct Materials 140,000
Direct Labour 85,000
Manufacturing overhead-variable 27,500
Manufacturing overhead-fixed 50,000
Selling Expense-variable 15,000
Selling Expense-fixed 30,000
Administrative Expense-variable 12,500
Administrative Expense-fixed 20,000

  1. Calculate Black Panthersbreak-even point in (1)units and (2)dollars and their annual profit.

  2. Assume the price remains at $50 per unit and variable costs remain the same per unit, but fixed costs increase by 30% annually. Calculate the percentage increase in unit sales required to achieve the same level of annual profit calculated in part (b).

  3. Determine the sales required to earn an operating income of $390,000 after tax. Black Panthers income tax rate is 40%.

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