
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.

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Chapter 21 Solutions
Fundamental Accounting Principles
- Sunset Industries has a debt-to-equity ratio of 1.25, a ROA (Return on Assets) of 7.5%, and total equity of $800,000. What are the company's equity multiplier, debt ratio, and ROE? (Round equity multiplier to 2 decimal places, debt ratio to 3 decimal places, and ROE to 1 decimal place.)arrow_forwardWhat is its return on equity ROE?arrow_forwardAccounting answerarrow_forward
- Accounting answer?arrow_forwardCompute net income under variable costing?arrow_forwardThe Willow Mills Company mills barley into flour. The equivalent units are measured in terms of tons of flour produced. At the beginning of the year, the mill contained 25tons of barley that was 40 percent milled. During the year, another 600 tons of barley were completely milled. At the end of the year, the company has 50 tons of barley 70 percent milled. How many equivalent tons of barley has Willow Mills Company milled during the year? Answerarrow_forward
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