Jassim Compagny is producing only one product. Two types of direct materials are used to produce this product: direct material type A and direct material type B. The estimated data for Jassim Compagny is as following: Sales $90,000 Costs: Direct materials type A $40,000 Hourly employees 15,000 Manager’s salary 10,000 Direct materials type B 5,000 Marketing 10,000 Total Costs 80,000 Budgeted pretax profit $ 10,000 a. Compute the revenues needed to achieve a target after-tax income of $30,000. The income tax rate is 20%. b. What is the margin of safety in revenue?
ATTENTION PLEASE MARKETING FEES IS 10000 not 5000 and there is no mention if the marketing is fixed or variable so take care at this point
ATTENTION PLEASE
ATTENTION PLEASE
Q1. Jassim Compagny is producing only one product. Two types of direct materials are used to produce this product: direct material type A and direct material type B.
The estimated data for Jassim Compagny is as following:
Sales $90,000
Costs:
Direct materials type A $40,000
Hourly employees 15,000
Manager’s salary 10,000
Direct materials type B 5,000
Marketing 10,000
Total Costs 80,000
Budgeted pretax profit $ 10,000
a. Compute the revenues needed to achieve a target after-tax income of $30,000. The income tax rate is 20%.
b. What is the margin of safety in revenue?
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