f. How many baseballs must the company sell if it desires to earn $657,600 in pretax profit? Answer baseballs g. If the company wants to earn $450,000 after tax and is subject to a 40 percent tax rate, how many baseballs must be sold? Answer baseballs h. How many baseballs would the company need to sell to break even if its fixed cost increased by $30,000? (Use original data.) Answer
Help with question F,G,H and I
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Beantown Baseball Company makes baseballs that sell for $13 per two-pack. Current annual production and sales are 576,000 baseballs. Costs for each baseball are as follows:
| Direct material | $2.00 |
| Direct labor | 1.25 |
| Variable overhead | 0.50 |
| Variable selling expenses | 0.25 |
| Total variable cost | $4.00 |
| Total fixed overhead | $750,000 |
a. Calculate the unit contribution margin in dollars and the contribution margin ratio for the company.
Note: Round percentage to two decimal places (for example, round 32.5555% to 32.56%).
Unit contribution margin in dollars $Answer
Contribution margin ratio Answer
%
b. Determine the break-even point in number of baseballs. Answer
c. Calculate the dollar break-even point using the contribution margin ratio.
Note: Round amount to the nearest whole dollar.
$Answer
d. Determine the company’s margin of safety in number of baseballs, in sales dollars, and as a percentage.
Note: Round margin of safety percentage to two decimal places (for example, round 32.555% to 32.56%).
Margin of safety in baseballs: Answer
Margin of safety in dollars: $Answer
Margin of safety percentage: Answer
%
e. (1) Compute the company’s degree of operating leverage.
Note: Round amount to two decimal places (for example, round 32.555 to 32.56).
Degree of operating leverage Answer
(2) If sales increase by 30 percent, by what percentage would pre-tax income increase?
Note: Round to the nearest whole percentage point (for example, round 24.5% to 25%).
Percentage increase in pre-tax income Answer
%
f. How many baseballs must the company sell if it desires to earn $657,600 in pretax profit? Answer
baseballs
g. If the company wants to earn $450,000 after tax and is subject to a 40 percent tax rate, how many baseballs must be sold? Answer
baseballs
h. How many baseballs would the company need to sell to break even if its fixed cost increased by $30,000? (Use original data.) Answer
baseballs
i. Beantown Baseball Company has received an offer to provide a one-time sale of 12,000 baseballs at $8.80 per two-pack to the Lowell Spinners. This sale would not affect other sales, nor would the cost of those sales change. However, the variable cost of the additional units would increase by $0.20 for shipping, and fixed cost would increase by $3,600. Based solely on financial information, should the company accept this offer?
Note: Do not use a negative sign with your answer.
Answer
$Answer
The company should Answer
The total contribution margin is the amount of money received after deducting the variable costs from the sales revenue. It can be divided by the number of units in order to compute the contribution margin per unit which is considered at the time of decision making.
(Note: Since you have posted a question with multiple sub-
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