What will be the increase in net income, Accounting Basics

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What will be the increase in net income

Racine Tire Co. manufactures tires for all-terrain vehicles. The tires sell for $60 and variable cost per tire is $30; monthly fixed cost is $450,000.

a. What is the break-even point in units?What is the break-even point in sales dollars?

b. If Ronnie Rice, the company's CEO, wants the business to earn a pre-tax profit of 25 percent of revenues, how many tires must be sold each month?

c. If the company is currently selling 20,000 tires monthly, what is the degree of operating leverage?

d. If the company can increase sales volume by 15 percent above the current level, what will be the increase in net income?What will be the new net income be?

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Accounting Basics: What will be the increase in net income

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Accounting Basics: What will be the increase in net income

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Recent Questions Asked Accounting Basics

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Request for Solution File

Ask an Expert for Answer!!

Accounting Basics: What will be the increase in net income

Reference No:- TGS0708025

Recent Questions Asked Accounting Basics

Q : Compute budgeted direct materials purchases for the quarter

Q : Hat is the overhead variance and is it overapplied

Q : Laramie distribution markets cds of numerous

Q : Explain what was net income for the year

Q : What will be the increase in net income

Q : What is the break-even point in bushels of corn

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Q : Find present value of an investment in plant and equipments

Q : How many shares of common stock are authorized

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