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a. How many gallons must Preston Products sell every month to break even? b. How many gallons must Preston Products sell to earn a monthly operating profit of $80,000 after taxes? Note: Round your answer to the nearest whole number.

a. How many gallons must Preston Products sell every month to break even? b. How many gallons must Preston Products sell to earn a monthly operating profit of $80,000 after taxes? Note: Round your answer to the nearest whole number.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Preston Products produces a disinfecting liquid. The liquid is sold in one gallon containers and has the following price and cost characteristics. $ 48.00 per gallon Sales price Variable costs 24.00 per gallon 518,400 per month Fixed costs Preston Products is subject to an income tax rate of 20 percent. Required: a. How many gallons must Preston Products sell every month to break even? b. How many gallons must Preston Products sell to earn a monthly operating profit of $80,000 after taxes? Note: Round your answer to the nearest whole number. a. Break-even sales in gallons b. Number of gallons to be sold
Transcribed Image Text:Preston Products produces a disinfecting liquid. The liquid is sold in one gallon containers and has the following price and cost characteristics. $ 48.00 per gallon Sales price Variable costs 24.00 per gallon 518,400 per month Fixed costs Preston Products is subject to an income tax rate of 20 percent. Required: a. How many gallons must Preston Products sell every month to break even? b. How many gallons must Preston Products sell to earn a monthly operating profit of $80,000 after taxes? Note: Round your answer to the nearest whole number. a. Break-even sales in gallons b. Number of gallons to be sold
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