Question & Answer: Assume that Limitless Labs, Inc., offers three basic drug-testing services for professional athletes. Here are its prices…..

Assume that Limitless Labs, Inc., offers three basic drug-testing services for professional athletes. Here are its prices and costs Price per Unit $ 580 900 4,200 Variable Cost per Unit $ 160 Units Sold Basic Retest Vital per Year 800 150 500 2,920 50 Variable costs include the labor costs of the medical technicians at the lab. Fixed costs of $440,000 per year include building and equipment costs and the costs of administration. A basic unit is a routine drug test administered. A retest is given if there is concern about the results of the first test, particularly if the test indicates that the athlete has taken drugs that are on the banned drug list. Retests are not done by the laboratory that performed the basic test. A vital test is the laboratorys code for a high-profile case. This might be a test of a famous athlete and/or a test that might be challenged in court. The laboratory does extra work and uses expensive expert technicians to ensure the accuracy of vital drug tests. Limitless Labs is subject to a 20 percent tax rate Required: a. How much will Limitless Labs earn each year after taxes? Earns b. Assuming the above sales mix is the same at the break-even point, at what sales revenue does Limitless Labs break even? (Do not round intermediate calculations. Round your final answer to the nearest whole dollar.) Break-even revenue c. At what sales revenue will the company earn $188,000 per year after taxes assuming the above sales mix? (Do not round intermediate calculations. Round your final answer to the nearest whole dollar.) Sales revenue

Assume that Limitless Labs, Inc., offers three basic drug-testing services for professional athletes. Here are its prices and costs Price per Unit $ 580 900 4,200 Variable Cost per Unit $ 160 Units Sold Basic Retest Vital per Year 800 150 500 2,920 50 Variable costs include the labor costs of the medical technicians at the lab. Fixed costs of $440,000 per year include building and equipment costs and the costs of administration. A basic “unit” is a routine drug test administered. A retest is given if there is concern about the results of the first test, particularly if the test indicates that the athlete has taken drugs that are on the banned drug list. Retests are not done by the laboratory that performed the basic test. A “vital” test is the laboratory’s code for a high-profile case. This might be a test of a famous athlete and/or a test that might be challenged in court. The laboratory does extra work and uses expensive expert technicians to ensure the accuracy of vital drug tests. Limitless Labs is subject to a 20 percent tax rate Required: a. How much will Limitless Labs earn each year after taxes? Earns b. Assuming the above sales mix is the same at the break-even point, at what sales revenue does Limitless Labs break even? (Do not round intermediate calculations. Round your final answer to the nearest whole dollar.) Break-even revenue c. At what sales revenue will the company earn $188,000 per year after taxes assuming the above sales mix? (Do not round intermediate calculations. Round your final answer to the nearest whole dollar.) Sales revenue

Expert Answer

 

d2)no since net profit is lesser than previous one

Still stressed from student homework?
Get quality assistance from academic writers!