Chapter 21, Problem 13E

To determine

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.