Principles of Cost Accounting
17th Edition
ISBN: 9781305087408
Author: Edward J. Vanderbeck, Maria R. Mitchell
Publisher: Cengage Learning
expand_more
expand_more
format_list_bulleted
Question
thumb_up100%
Chapter 10, Problem 13E
1.
To determine
Calculate the amount of sales revenue in order to achieve the after-tax profit of $150,000.
2.
To determine
Calculate the amount of sales revenue in order to achieve the $150,000 of profit, if there had been no income tax.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
A company has total fixed costs of $200,000. Its product sells for $25 per unit and variable costs amount to $15 per unit. The company wishes to earn an after-tax income of $35,000. Assume that the company has a 30% tax rate.
a. How many units must be sold to achieve this after-tax income level?
b. What level of pre-tax income must the firm earn to achieve the desired result described above?
Can you show your workings please
JaJa m Manufacturing incurs annual fixed costs of P250,000 in producing and selling a single product. Estimated unit sales are 187,500. An after-tax income of P75,000 is desired by management. The company projects its income tax rate at 40 percent. What is the maximum amount that Harry can expend for variable costs per unit and still meet its profit objective if the sales price per unit is estimated at P6?
I PDB Manufacturing Corp. produces and sells a single product. The selling price is
P25 and the variable costs is P15 per unit. The corporation's fixed costs is
P100,000 per month. Average monthly sales is 11.000 units.
1. The corporation's contribution margin per unit and as a percent of sales (CMR)
is?
2. The corporation's break-even point is?
3. If the corporation desires to eam profit of P20,000 before tax, it must generate
sales of?
4. If the corporation pays corporate income tax at the rate of 25%, and it desires to
eam after-tax profit of P21,000, it must generate sales of?
5. With an average monthly sale of 11,000 units, the corporation's margin of safety
is?
6. The margin of safety ratio and the break-even sales ratio are?
7. If fixed costs will increase by P20,000, the break even point in units will
increase(decrease) by?
8. If variable costs per unit will go up by P5, the peso break-even sales will increase
(decrease) to?
9. If selling price will increase to P30, the…
Chapter 10 Solutions
Principles of Cost Accounting
Ch. 10 - What is the difference between absorption costing...Ch. 10 - Distinguish between product costs and period...Ch. 10 - What effect will applying variable costing have on...Ch. 10 - What are the advantages and disadvantages of using...Ch. 10 - Prob. 5QCh. 10 - What is the difference between gross margin and...Ch. 10 - Why are there objections to using absorption...Ch. 10 - What are common costs?Ch. 10 - How is a contribution margin determined, and why...Ch. 10 - What are considered direct costs in segment...
Ch. 10 - What is cost-volume-profit analysis?Ch. 10 - Prob. 12QCh. 10 - What steps are required in constructing a...Ch. 10 - What is the difference between the contribution...Ch. 10 - What impact does income tax have on the break-even...Ch. 10 - Define differential analysis, differential...Ch. 10 - Prob. 17QCh. 10 - Prob. 18QCh. 10 - What are distribution costs?Ch. 10 - What is the purpose of the analysis of...Ch. 10 - In cost analysis, what determines which costs...Ch. 10 - Yellowstone Fabricators uses a process cost system...Ch. 10 - Using the information presented in E10-1, prepare...Ch. 10 - The chief executive officer of Acadia, Inc....Ch. 10 - The following production data came from the...Ch. 10 - A company had income of 50,000, using variable...Ch. 10 - The fixed overhead budgeted for Ranier Industries...Ch. 10 - Columbia Products Inc. has two divisions, Salem...Ch. 10 - The sales price per unit is 13 for the Voyageur...Ch. 10 - Teton, Inc. sells its only product for 50 per...Ch. 10 - A new product is expected to have sales of...Ch. 10 - Augusta Industries manufactures and sells two...Ch. 10 - A company has sales of 1,000,000, variable costs...Ch. 10 - Prob. 13ECh. 10 - A company has prepared the following statistics...Ch. 10 - Prob. 15ECh. 10 - Prob. 16ECh. 10 - Redwood Industries needs 20,000 units of a certain...Ch. 10 - Prob. 18ECh. 10 - Biscayne Industries has determined the cost of...Ch. 10 - Roosevelt Enterprises has determined the cost of...Ch. 10 - Prob. 3PCh. 10 - Prob. 4PCh. 10 - Prob. 5PCh. 10 - Arctic Software Inc. has two product lines. The...Ch. 10 - Prob. 7PCh. 10 - The production of a new product required Zion...Ch. 10 - Grand Canyon Manufacturing Inc. produces and sells...Ch. 10 - Prob. 10PCh. 10 - Emerald Island Company is considering building a...Ch. 10 - Royale Aluminum desires an after-tax income of...Ch. 10 - Deuce Sporting Goods manufactures a high-end model...Ch. 10 - Prob. 14PCh. 10 - Prob. 15PCh. 10 - Prob. 1MCCh. 10 - Denali Company manufactures household products...
Knowledge Booster
Similar questions
- Delta Co. sells a product for $150 per unit. The variable cost per unit is $90 and fixed costs are $15,250. Delta Co.s tax rate is 36% and the company wants to earn $44,000 after taxes. What would be Deltas desired pre-tax income? What would be break-even point in units to reach the income goal of $44,000 after taxes? What would be break-even point in sales dollars to reach the income goal of $44000 after taxes? Create a contribution margin income statement to show that the break-even point calculated in B, generates the desired after-tax income.arrow_forward4. A firm produces and sells a product with a contribution margin of $32 per unit. The firm is presently selling 90,000 units and earning $240,000 in after-tax income. Taxes are $80,000 at a 25% tax rate. If the firm desires to increase its after-tax income to $300,000, how many more units must it sell? Required: a. Calculate the contribution margin per unit. b. Calculate the break-even point in units.arrow_forwardHelp, I know the answer is between b and d but I am not sure which one?, please solve it by yourself A company requires $600,000 in sales to meet its target net income after tax. Itscontribution margin is 40%, and fixed costs are $80,000. How much is the target netincome, given that its after-tax rate is 70%?a. $160,000b. $112,000c. $400,000d. $48,000arrow_forward
- George Manufacturing incurs annual fixed costs of P130,000 in producing and selling a single product. Estimated unit sales are 110,000. An after-tax income of P140,000 is desired by management. The company projects its income tax rate at 30 percent. What is the maximum amount that George can expend for variable costs per unit and still meet its profit objective if the sales price per unit is estimated at P8?arrow_forwardNUBD Co. incurs annual fixed costs of P250,000 in producing and selling a single product. Estimated unit sales are 125,000. An after-tax income of P75,000 is desired by management. The company projects its income tax rate at 25 percent. What is the maximum amount that NUBD can expend for variable costs per unit and still meet its profit objective if the sales price per unit is estimated at P6?arrow_forwardCan you please give me correct answer?arrow_forward
- Suppose ABC Corp’s break-even point is revenues of $1,100,000. Fixed costs are $660,000 a. Calculate the contribution margin percentage. b. Calculate the selling price if variable costs are $16 per unit. c. Suppose 75 000 units are sold. Calculate the profit earned. d. Will the company be profitable if able to sell 30,000 units? Explain. c. What should the company do to increase its profit above break-even point?arrow_forwardBasic Corp. produces and sells a single product. The selling price is P25 and the variable costs is P15 per unit. The corporation's fixed costs is P100.000 Der month. Average monthlv sales is 11.000 units. 5. If the corporation pays corporate income tax at a rate of 30% and it wants to earn after tax profit of P21,000, it must generate sales of (answer in units) 6. How much sales (in pesos) must be generated to earn profit that is 8% of such sales. 7. How many units must be sold to earn profit of P2.00 per unit? 8. With an average monthly sale of 11,000 units, the corporation's margin of safety (in units) is? 9. At the present average monthly sales level of 11,000 units, the corporation's degree of operating leverage is? 10. If fixed costs will increase by P20,000, the break-even point in units will increase (decrease) by? 11. If variable costs per unit will go up by P5.00, the peso break even sales will increase (decrease) to? 12. If selling price will increase to P30, the break-even…arrow_forwardA firm has fixed costs of P200,000 and variable costs per unit of P6. It plans on selling 40,000 units in the coming year. If the firm pays income taxes on its income at a rate of 40 percent, what sales price must the firm use to obtain an after-tax profit of P24,000 on the 40,000 units?arrow_forward
- Suppose ABC Corp’s break-even point is revenues of $1,100,000. Fixed costs are $660,000. Calculate the contribution margin percentage. Calculate the selling price if variable costs are $16 per unit. Suppose 75 000 units are sold, calculate the profit earned. Willo the company beprofitable if able to sell 30,000 units? Explain. What should the company do to increase its profit above break-even point.arrow_forward19.Bluejeans Company has an after-tax profit of P140,000. Bluejeans has a return on sales of 20% and the tax rate is 30%. The total fixed costs of Bluejeans amounts to P100,000, what is the contribution margin ratio if the sales volume increases to 150%?arrow_forwardBecause Lanisha Motors operates in a very competitive environment, it is essential for the management team to understand its cost structure and how it affects the company's profitability. For one of the key products, Lanisha notes a selling price of $12 and a variable cost of $4 per unit, fixed costs associated with this product line are $20,000. Lanisha Motors is subject to a tax rate of 25%. If Lanisha wants to generate operating income of $10,000, how many units of this product must be sold? How many must be sold to generate $12,000 of after-tax income?arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Principles of Cost AccountingAccountingISBN:9781305087408Author:Edward J. Vanderbeck, Maria R. MitchellPublisher:Cengage LearningPrinciples of Accounting Volume 2AccountingISBN:9781947172609Author:OpenStaxPublisher:OpenStax CollegeEBK CONTEMPORARY FINANCIAL MANAGEMENTFinanceISBN:9781337514835Author:MOYERPublisher:CENGAGE LEARNING - CONSIGNMENT
- Cornerstones of Cost Management (Cornerstones Ser...AccountingISBN:9781305970663Author:Don R. Hansen, Maryanne M. MowenPublisher:Cengage Learning
Principles of Cost Accounting
Accounting
ISBN:9781305087408
Author:Edward J. Vanderbeck, Maria R. Mitchell
Publisher:Cengage Learning
Principles of Accounting Volume 2
Accounting
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax College
EBK CONTEMPORARY FINANCIAL MANAGEMENT
Finance
ISBN:9781337514835
Author:MOYER
Publisher:CENGAGE LEARNING - CONSIGNMENT
Cornerstones of Cost Management (Cornerstones Ser...
Accounting
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Cengage Learning