The Clearwater Aquarium Company will produce 66,000 10-gallon aquariums next year. Variable costs are 40% of sales while fixed costs total $133,200. At what price must each aquarium be sold for Clearwater to obtain an EBIT of $114,000?© BrainMass Inc. brainmass.com June 3, 2020, 10:47 pm ad1c9bdddf
Using the format from income statement, we have:
Sales Less cost = EBIT
Therefore, we have
This solution is comprised of a step-by-step calculation of the unit price required to meet a certain level of Earnings Before Interest and Taxes (EBIT).