PLEASE SHOW ALL WORR 1. (25 pts) Moto, Inc. manufactures and sells scooters. A p
ID: 1767498 • Letter: P
Question
PLEASE SHOW ALL WORR 1. (25 pts) Moto, Inc. manufactures and sells scooters. A projected income statement for the expected sales volume of 100,000 scooters is as follows: Sales Variable expenses Contribution margin Fixed expenses Before-tax profit $7.200,000 2.800,000 $4,400,000 3,000000 $1,400,000 a) How many scooters would need to be sold to have a before-tax profit of $2,900,000 b) What dollar sales volume would be required to achieve $3,500,000 of before-tax profit? Now assume that Moto, Inc. is subject to a 40% tax. How many scooters must it sell to c) achieve an after-tax income of $1,500,000?Explanation / Answer
Solution :-
A) CALCULATE HOW MANY SCOOTERS NEED TO BE SOLD FOR BEFORE TAX PROFIT OF 2900000:
PROFIT = SALES-VARIABLE COST -FIXED COST
2900000=72X-28X-3000000
5900000=44X
X(SCOOTERS) =134091 SCOOTER....
B) CALCULATE DOLLARS SALES VOLUME WOULD BE REQUIRED TO ACHIEVE 3500000 BEFORE TAXPROFIT :
PROFIT = SALES - VARIABLE COST-FIXED COST
3500000=72X-28X-3000000
6500000=44X
X(SCOOTERS) = 147727.27
DOLLARS VOLUME = 10000000
C) CALCULATE HOW MANY SCOOTERS FOR EARN AFTER TAX 1500000 :
BEFORE TAX = 1500000*100/60=2500000
PROFIT = SALES - VARIABLE COST - FIXED COST
2500000=75X-30X-3000000
5500000=44X
X(SCOOTERS) = 125000