Cost Accounting - Units and Sales to Earn After-Tax Target Profit... Please help
ID: 2422070 • Letter: C
Question
Cost Accounting - Units and Sales to Earn After-Tax Target Profit... Please help fill in the BLANKS. Thanks kindly!!
To convert before-tax income to after-tax income, divide the before-tax income by 1 minus the tax rate.
Example: Kalman Company has the following information:
Kalman wants to earn after-tax income of $7,440 next year. What is the before-tax income?
Suppose Kalman's tax rate was 35%, the before-tax income needed to earn $7,440 after taxes would be LOWER THAN $12,400.
The before-tax income in this case would be $ 11,446.0
The sales revenue needed to earn this level of before-tax income would be ******$BLANK ANSWER******* (round your intermediate calculations and final answer to the nearest dollar).
We can show that this is true by constructing an income statement:
Using the Kalman Company data, for each of the following scenarios, fill in the before-tax income needed and the sales revenue needed to earn the given after-tax income. (Round all dollar amounts to the nearest dollar.)
Price $10 Unit variable cost $2.6 Total fixed cost $33,400 Tax rate 40%Explanation / Answer
Target After-Tax Income Tax Rate Before-Tax Income Needed Sales Revenue $ $ A $6,370 40% 10617 56211.94 B $6,370 35% 9800 51887.94 C $6,370 25% 8493 44969.55