Target before-tax net income=$88000/(1-tax rate)
=$88000/(1-0.2)=$110,000
Target Contribution margin=Target before tax net income+Fixed costs
=(110,000+96000)=$206000
Hence target sales=$206000/Contribution margin ratio
=$206000/0.4
=-$515,000.
Question 12 How many sales are required to earn a target after-tax net income of $88000...
How many sales are required to earn a target after-tax net income of $87000 if total fixed costs are $92000, the contribution margin ratio is 40%, and the tax rate is 20%? O $6960000 O $230000 O $501875 O $1317500
QUESTION 6 How much sales are required to earn a target income of $120,000 if total fixed costs are $150,000 and the contribution margin ratio is 40% $450,000 $300,000 $675,000 $495,000
Multiple Choice Question 132 How much sales are required to earn a target income of $249600 if total fixed costs are $312000 and the contribution margin ratio is 40%? $624000 $936000 $1404000 $1029600 LINK TO TEXT
After-Tax Profit Targets Olivian Company wants to earn $540,000 in net (after-tax) income next year. Its product is priced at $350 per unit. Product costs include: Direct materials $105.00 Direct labor $77.00 Variable overhead $17.50 Total fixed factory overhead $420,000 Variable selling expense is $14 per unit; fixed selling and administrative expense totals $270,000. Olivian has a tax rate of 40 percent. Required: 1. Calculate the before-tax profit needed to achieve an after-tax target of $540,000. $ 2. Calculate the...
Margin of safety ratio. 4. Net operating income ercentage. 10-13 Effect of taxes on break-even and target volume Yosemite Enterprises desires to earn an after-tax income of $150,000 It has fixed costs of $1,000,000. a unit sales price o! $500, and unit variable cosEs of $200. The company is in the 30% tax bracket. 1. How many dol ars of sales revenue must be earned to achieve the after-tax profit of $150.000? 2. How many dollars of revenue would have...
After-Tax Profit Targets Olivian Company wants to earn $360,000 in net (after-tax) income next year. Its product is priced at $350 per unit. Product costs include: $105.00 Direct materials Direct labor Variable overhead Total fixed factory overhead $77.00 $17.50 $400,000 Variable selling expense is $14 per unit; fixed selling and administrative expense totals $250,000. Olivian has a tax rate of 40 percent. Required: 1. Calculate the before-tax profit needed to achieve an after-tax target of $360,000. $ 600,000 2. Calculate...
Erin Shelton, Inc., wants to earn a target profit of $860,000 this year. The company’s fixed costs are expected to be $1,120,000 and its variable costs are expected to be 60 percent of sales. Erin Shelton, Inc., earned $760,000 in profit last year. Required: 1. Calculate break-even sales for Erin Shelton, Inc. 2. Prepare a contribution margin income statement on the basis break-even sales. 3. Calculate the required sales to meet the target profit of $860,000. 4. Prepare a contribution...
Exercise #5: Margin of Safety and Target Net Income Hakala Corporation makes surfboards that sell for $5,600 each. For the upcoming year, management expects fixed costs to total $3,200,000 and variable costs to be $4,200 per unit. Compute the following: (a) break-even point in dollars using the contribution margin ratio, (b) the margin of safety and margin of safety ratio assuming actual sales are $13,824,000, and (c) the sales dollars required to earn net income of $4,100,000.
Effect of taxes on break-even and target volume Machine INC desires an after-tax income of $500,000. It has fixed costs of $2,500,000, a unit sales price of $300, and unit variable costs of $150; it is in the 40% tax bracket. Required: A. What amount of the pre-tax income is needed to earn an after-tax income B. What target volume sales revenue must be reached to earn the $500,000 C. Assuming that this is a single-product firm, how many units...
3-b. Verify your answer by preparing a contribution format income statement at the target sales level. Menlo Company Contribution Income Statement Total Per unit 4. Refer to the original data. Compute the company's margin of safety in both dollar and percentage terms. Round your percentage answer to 2 decimal places (i.e.1234 should be entered as 12.34). Dollars Percentage Margin of safety 5. What is the company's CM ratio? If monthly sales increase by $98,000 and there is no change in...