Assume the following cost information for Fernandez Company: Selling price $180 per unit Variable costs $60...
Assume the following cost information for Fernandez Company: Selling price $180 per unit Variable costs $60 per unit Total fixed costs $85,000 Tax rate 40% What minimum volume of sales dollars is required to earn an afterminus−tax net income of $60,000? (Do not round interim calculations and round the final answer to the nearest dollar.) A. $277,500 B. $150,000 C. $212,500 D. $127,500
Homework Answers
Answer is A: $ 277500
Let the selling units =x
Than,
Sales-variable cost- fixed cost= before tax profit
Before tax profit= $ 60000/40%=$100000
So,
(180-60)x-85000=100000
120x-85000=100000
120x=185000
x=1541.66666667 units
Sales in dollar =1541.6666667 *180
= $ 277500
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Assume the following cost information for Fernandez Company:
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