Ro Company, a man ufacturer of quality
 Ro Company, a man ufacturer of quality handmade pipes, has experienced a stea its sales for the past five years. Increased competition, however, has led the  presi to believe that an aggressive advertising campaign will be necessary next year to company's present growth. To prepare for next year 's advertising campaign, th accountant presents the following data for the current year, 19A:
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Variable costs (per pipe): Direct labor
Direct materials Variable overhead
Total varia ble costs Fixed costs:
$Â Â Â Â Â Â Â Â 8.00
3.25
2.50
$Â Â Â Â Â 13.75
|
Man ufact uring
|
$ 25,000
|
|
Selling
|
40,000
|
|
Administrative
|
70,000
|
|
Total fixed costs
|
$135,000
|
Sales price per pipe
Expected sales, l 9A (20,000 pipes) Income tax rate
$Â Â Â Â Â Â Â Â Â Â Â 25
$500,000
40%
Mr. Ro has set the 19B sales target at a level of $550,000, or 22,000  pipes. following:
(a ) The projected af ter-tax net income for 19A;
 ( b ) the break-even sale 19A;
(c) the af ter-tax net income for 19B if an additional fixed selling expense spent for advertising in 19B in order to attain the 19B sales target;Â
( d )Â the break- dollars for 19B if the additional $11,250 is spent for advertising;Â
( e) the sales in dol to equal 19A's after-tax net income, if the additional $11,250 is spent for  advertising
(f) the maximum amount that can be spent on advertising at a sales level of 22,00 after-tax net income of $60,000 is desired.
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Answers
Status NEW
Posted 24 Apr 2017 05:04 PM
My Price 8.00
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Attachments
file 1493054190-1368032_1_636285470138204037_CVP-Analysis-and-decisions.xlsx preview (434 words )
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