Cost-volume-profit (CVP) analysis is used to determine how changes in costs and volume affect a company's operating income and net income.One of the helpful uses of CVP analysis is the determination of the sales required to generate a target profit (income).
Post tax earnings are a company's pretax earnings less income tax.
Whereas pretax earnings are a company's earnings after all operating expenses have been deducted from total sales or revenues, but before income taxes have been subtracted.
Contribution margin means sales price less variable costs.Contribution represents the portion of sales revenue that is not consumed by variable costs and so contributes to the coverage of fixed costs.
To Calculate:
The pretax income and post- tax income calculated is asked to be calculated in the specific question.
Want to see the full answer?
Check out a sample textbook solutionChapter 21 Solutions
FUND.ACCT.PRIN.-CONNECT ACCESS
- Need help with this financial accounting questionarrow_forwardGary Watson, a graduating business student at a small college, is currently interviewing for a job. Gary was invited by both Tilly Manufacturing Company and Watson Supply Company to travel to a nearby city for an interview. Both companies have offered to pay Gary's expenses. His total expenses for the trip were $96 for mileage on his car and $45 for meals. As he prepares the letters requesting reimbursement, he is considering asking for the total amount of the expenses from both employers. His rationale is that if he had taken separate trips, each employer would have had to pay that amount. Who are the parties that are directly affected by this ethical dilemma? multiple choice 1 Tilly Manufacturing Company Watson Supply Company Both the employers Are the other students at the college potentially affected by Gary's decision? multiple choice 2 Yes No Are the professors at the college potentially affected by Gary's decision? multiple choice 3 Yes No…arrow_forwardSolve with accounting explanationarrow_forward
- AccountingAccountingISBN:9781337272094Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.Publisher:Cengage Learning,Accounting Information SystemsAccountingISBN:9781337619202Author:Hall, James A.Publisher:Cengage Learning,
- Horngren's Cost Accounting: A Managerial Emphasis...AccountingISBN:9780134475585Author:Srikant M. Datar, Madhav V. RajanPublisher:PEARSONIntermediate AccountingAccountingISBN:9781259722660Author:J. David Spiceland, Mark W. Nelson, Wayne M ThomasPublisher:McGraw-Hill EducationFinancial and Managerial AccountingAccountingISBN:9781259726705Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting PrinciplesPublisher:McGraw-Hill Education