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Posted: August 23rd, 2024
The Barrister Mug Company manufactures plastic mugs that sell to wholesalers
The Barrister Mug Company manufactures plastic mugs that sell to wholesalers for $4.60 each. Variable and fixed costs are as follows:Variable Costs per UnitFixed Costs per MonthManufacturing: Direct materials$0.69Factory overhead$ 9,200 Direct labor0.81Selling and adm. 6,900 Factory overhead 0.57$2.07 Total$16,100 Selling and adm.0.46 Total$2.53Barrister Mug produced and sold 11,500 cups during April 2016. There were no beginning or ending inventories.Required:a.Determine Barrister Mug's monthly break-even point in units.b.If monthly sales increase by 575 cups, what will be the change in monthly profits?c.If Barrister Mug is now subject to an income tax of 40 percent, what dollar sales volume is required to earn a monthly after-tax net income of $13,800?
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