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Quiz 3

Judith Ltd produces bamboo furniture including tables and chairs. Tables cost $80 each to produce and sell, with a $65 variable cost, while chairs cost $48 each and have a $33 variable cost. Fixed costs are $38,400. To break even, Judith Ltd needs to sell 571 units at $32,857 for tables and 857 units at $41,241 for chairs. To earn a $54,000 profit before tax, they need to sell 714 tables for $57,120 and 1,286 chairs for $61,728. If they sell 2,000 units total with a 30% tax rate, their after tax profit is $21,600.

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66 views1 page

Quiz 3

Judith Ltd produces bamboo furniture including tables and chairs. Tables cost $80 each to produce and sell, with a $65 variable cost, while chairs cost $48 each and have a $33 variable cost. Fixed costs are $38,400. To break even, Judith Ltd needs to sell 571 units at $32,857 for tables and 857 units at $41,241 for chairs. To earn a $54,000 profit before tax, they need to sell 714 tables for $57,120 and 1,286 chairs for $61,728. If they sell 2,000 units total with a 30% tax rate, their after tax profit is $21,600.

Uploaded by

Rao Shahbaz
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Quiz3dueWeek10,Friday,2017,10:00pm

Question
JudithLtdisacompanyinWollongongthatproducesandsellsbamboooutdoorfurniture.Thecompanyhas
twoproducts;coffeetablesandchairs.Thesellingpriceofthetableis$80perunit,andchairis$48per
unit.Thevariablecostofthetableis$65andchairis$33perunitwhilethefixedcostsare$38,400.The
salesmixoftheproductsis35%offurnituresoldaretablesand65%arechairs.
Required(showyourworking):
1) Calculatethebreakevenpointinunitsanddollarsforeachtypeoffurniture. 50%
2) Calculatehowmanyinunitsandindollarsforeachtypeoffurnituremustbesoldifthe 30%
companywanttoearnprofitbeforetax$54,000.
3) Calculatetheoperatingprofit/lossaftertaxifthetotalsalesoffurniture2,000unitsand 20%
incometaxare30%.

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