Question

eBook Print Question 3 Partially correct Mark 1.00 out of 3.00 P Flag question Net Income Planning Holland Corporation earned an after-tax net income of $182,000 last year. Fixed costs were $750,000. The selling price per unit of its product was $130, of which $60 was a contribution to fixed cost and net income. The income tax rate was 35%. Round UP answers to the nearest unit, when applicable. a. How many units of product were sold last year? 17,167 X units b. What was the break-even point in units last year? 12,500 units c. The company wishes to increase its after-tax net income by 20% this year. If selling prices and the income tax rate remain unchanged, how many units must be sold? 18,100 X units Check

Answer 1

Part 1

After tax income	$               182,000
Fixed cost	$               750,000
Selling price per unit	$                       130
Contribution	$                          60
Income tax rate	35%
Income Before tax (182000/65*100)	$               280,000
Fixed cost	$               750,000
Contribution	$           1,030,000
No of units(1030000/60)	17167
Part 3
After Tax income(182000+20% of 182000)	$               218,400
Income Tax	$               117,600
Income Before Tax	$               336,000
Fixed cost	$               750,000
Contribution	$           1,086,000
No. of units(1086000/60)	18100

Answer seems correct only.