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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. $ 70.00 per gallon 46.00 per gallon 544,800 per month Preston Products is subject to an income tax rate of 20 percent. Sales price Variable costs Fixed costs 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 $91,000 after taxes? Note: Round your answer to the nearest whole number. a. Break-even sales in gallons b. Number of gallons to be sold

Preston Products produces a disinfecting liquid. The liquid is sold in one gallon containers and has the following price and cost characteristics. $ 70.00 per gallon 46.00 per gallon 544,800 per month Preston Products is subject to an income tax rate of 20 percent. Sales price Variable costs Fixed costs 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 $91,000 after taxes? Note: Round your answer to the nearest whole number. a. Break-even sales in gallons b. Number of gallons to be sold

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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Exercise 3-47 (Algo) CVP with Income Taxes (LO 3-4) Preston Products produces a disinfecting liquid. The liquid is sold in one gallon containers and has the following price and cost characteristics. $ 70.00 per gallon 46.00 per gallon 544,800 per month 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 $91,000 after taxes? Note: Round your answer to the nearest whole number. Sales price Variable costs Fixed costs a. Break-even sales in gallons b. Number of gallons to be sold
Transcribed Image Text:Exercise 3-47 (Algo) CVP with Income Taxes (LO 3-4) Preston Products produces a disinfecting liquid. The liquid is sold in one gallon containers and has the following price and cost characteristics. $ 70.00 per gallon 46.00 per gallon 544,800 per month 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 $91,000 after taxes? Note: Round your answer to the nearest whole number. Sales price Variable costs Fixed costs a. Break-even sales in gallons b. Number of gallons to be sold
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