The Pink Flamingo, Inc., manufactures plastic lawn ornaments. Currently the firm manufactures three items: reindeer, snowmen, and flamingos. For each reindeer, two snowmen and four flamingos are sold.
The firm is in a 40 percent tax bracket.
a. What is the annual break-even point in revenues?
b. How many reindeer, snowmen, and flamingos are expected to be sold at the breakeven point?
c. If the firm desires pre-tax income of $250,428, how much total revenue is required, and how many units of each product must be sold?
d. If the firm desires after-tax income of $155,718, how much total revenue is required, and how many units of each product must be sold?
e. If the firm achieves the revenue determined in (d), what is its margin of safety in dollars and as apercentage?
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