Blossom Machine Works produces soft serve ice cream freezers. The freezers sell for $17,000, and variable costs total $12,800 per unit. Blossom incurs $13,490,000 in fixed costs during the year. The company's tax rate is 30%. How many freezers must Blossom sell to generate net income of $7,528,000?

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Business

Millie

17 January, 14:42

Blossom Machine Works produces soft serve ice cream freezers. The freezers sell for $17,000, and variable costs total $12,800 per unit. Blossom incurs $13,490,000 in fixed costs during the year. The company's tax rate is 30%. How many freezers must Blossom sell to generate net income of $7,528,000?

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Answers (1)

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Jaron Prince · Answer 1

5005 freezers

Explanation:

Sales 17,000

Variable Cost per unit 12,800

Contribution per unit 4,200

Fixed Cost 1,3490,000

Desired Profit 7,528,000

Sale for Desired profit = (Desired profit + Fixed Cost) / contribution per unit = (7528000 + 13490000) / 42001 = 5005 units

It is assumed that the price is exclusive of tax. So tax is not being dealt in this solution.