In 2019, X Company's profit function was 0.35R - $87,100, where R is revenue. In 2020,...

Question

Question

In 2019, X Companys profit function was 0.35R - $87,100, where R is revenue. In 2020, the relationship between revenue and v

Answer 1

Answer #1

Required profit after taxes = $31000

Required profit before taxes = After tax profit/(1-Tax rate)

= 31000/(1-40%)

= $51,666.67

Add: Fixed costs 87100-19162 = $67938

Required contribution margin = $119,604.67

Required revenue = 119,604.67/0.35

= $341,727.63

Answer 2

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