Explore BrainMass

Explore BrainMass

    Unit price and EBIT.

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    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

    Solution Preview

    Using the format from income statement, we have:

    Sales Less cost = EBIT

    Therefore, we have

    Sales ...

    Solution Summary

    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).