Stewart Company The following information relates to financial projections of Stewart Company:...

Question:

Stewart Company The following information relates to financial projections of Stewart Company: Projected sales 60,000 units Projected variable costs $2.00 per unit Projected fixed costs$50,000 per year Projected unit sales price $7.00 Refer to Stewart Company. How many units would Stewart Company need to sell to earn a profit before taxes of $10,000?

a. 10,000

b. 25,714

c. 12,000

d. 8,571

Profit:

Profit is a measure of how much money a company is earning. It is defined as total revenue subtracting total expenses. Gross profit, earnings before taxes (EBT), earnings before interests and taxes (EBIT), net income, and retained earnings are some of the commonly-used profit measures.

Answer and Explanation:

The answer is c. 12,000.

Profit = Revenue - Total Cost, that is, Revenue = Profit + Total Cost. Let {eq}X {/eq} denote sales volume. Then, in this...

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What Is Gross Profit? - Definition, Formula & Calculation

from FTCE Marketing 6-12 (057): Test Practice & Study Guide

Chapter 8 / Lesson 7
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