If the sale price per unit is 8 the unit contribution


Managerial Accounting Assignment

Problem 1: Howell Industries has total fixed costs of $150,000 and the company's contribution margin represents 60% of revenue per unit. Last year, Howell Industries earned $50,000 pre-tax, and this year it would like to improve upon that figure by 20%. If the unit price is $125, how many units must Howell Industries sell to meet this objective?

Problem 2: If the sale price per unit is $8, the unit contribution margin is $4, and total fixed expenses are $19,500, what are the breakeven sales in units?

Problem 3: Compute the Net present value:

Howell's Company is considering the purchase of $200,000 machine that would reduce operating costs by 38,000 per year. At the end of the machine's seven year useful life, it will have a zero salvage value. The company's required rate of return is 12%. Will you accept the project? Why?

Problem 4: If you would like to have $75,000 in 4 years how much would you need to save today assuming you would earn an 10% return?

Problem 5: How much will $85,000 be worth in 10 years invested at 8%?

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Managerial Accounting: If the sale price per unit is 8 the unit contribution
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