Caramel Corporation has 5,000 shares of stock outstanding.
1 answer:
<u>Answer and Explanation:</u>
Caramel Corporation outstanding share are 5000
Caramel Corporation distributes $145,000 in an exchange for 1000 number of shares in a qualifying stock redemption.
Given : caramel Corportaion has E&P of around $300,000.
E&P attributable to 1000 number of shares =
Therefore, the consequence of this redemption are $60,000 charge to E&P and reduction in caramel Corporation paid-in capital account is $85000 ($145000 subtract $60000)
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Answer:
1. Break even points in units will be = 2,700 units
2. Break-even point in dollar sales = $56,700
3. In case fixed expense increase by $600 then Break even point in unit sales = 2,900 units
Explanation:
Break even point =
Fixed Cost = $8,100
Contribution per unit = Sale Price - Variable Cost = $21 - $18 = $3
1. Break even points in units will be
=
2. Break-even point in dollar sales
= Break even point in units X Sale price per unit
= 2,700 units X $21 = $56,700
3. In case fixed expense increase by $600 then Break even point in unit sales
= = 2,900 units
Final Answer
1. Break even points in units will be = 2,700 units
2. Break-even point in dollar sales = $56,700
3. In case fixed expense increase by $600 then Break even point in unit sales = 2,900 units