Journalize the following transactions for Armour Inc. using both the periodic inventory system and the perpetual inventory syste
m, presented in a side-by-side format shown at the end of this exercise.Oct.7 Sold merchandise on credit to Rondo Distributors, terms n/30, FOB destination, $1,200; the cost of the merchandise was $720.Oct. 8 Purchased merchandise, $10,000, terms FOB shipping point, 2/15, n/30, with prepaid freight charges of $525 added to the invoice.
1 answer:
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Answer:
a. 7,900
b. 10,100
Explanation:
As for the provided information,
We know at break even point taxes shall be = 0 as there are no profits and no losses.
a. At break even: =
Fixed Cost = $308,100
Contribution per unit = Selling price - Variable cost = $79 - $40 = $39
Therefore, break even units =
b. In case the company wants a profit of $51,480 after tax @ 40% then,
Earnings before taxes = = $85,800
Therefore, number of units =
= = 10,100