Dannica Corporation produces products that it sells for $40 each. Variable costs per unit are $25, and annual fixed costs are $360,000. Dannica desires to earn an after-tax (post-tax) profit of $150,000 for the year. The expected income tax rate is 20%.
Determine the sales volume in units required to earn the desired after-tax profit.
Multiple Choice
None of the choices presented are within 100 units of the correct answer.
28,922 Units
34,000 Units
36,500 Units
30,180 Units
Answer ) 36500 Units
Calculation:-
Particular | Amount |
Sales Revenue (36500*$40) $1460000
(less) Variable cost (36500*25) ($912500)
Contribution $547500
(less) Fixed Cost ($360000)
Net Profit Before Tax $187500
(less) Tax (187500*20%) ($37500)
Net Profit $150000
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Dannica Corporation produces products that it sells for $40 each. Variable costs per unit are $25,...
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