Determine the break-even sales revenue for the Childrens Boots Calculate the number of pairs of...
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Accounting
Determine the break-even sales revenue for the Childrens Boots
Calculate the number of pairs of each product that must be sold for MuckIt Limited to earn a before-tax profit of $750,000. Assume a tax rate of 30 percent.
Calculate MuckIt Limiteds degree of operating leveragecalculate MuckIt Limiteds profit before tax if they experience a sales increase of 7 per cent.
Explain why Cost-Volume-Profit (CVP) analysis should be treated with caution.
Cost-Volume-Profit (CVP) Analysis Muckit Limited sells pairs of gumboots for adults and children which have the following data: Children's Boots Adult's Boots Company Total (12,000 pairs) (30,000 pairs) Sales $360,000 $ 2,400,000 $ 2,760,000 Variable costs (168,000) (780,000) (948,000) Contribution margin 192,000 1,620,000 1,812,000 Direct fixed costs (70,000) (650,000) (720,000) Product margin $ 122,000 $ 970,000 1,092,000 Common fixed costs (600.000) Net profit $ 492,000
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