Can someone please Help me how to solve / formula to calculate my homework, I ne
ID: 2529256 • Letter: C
Question
Can someone please Help me how to solve / formula to calculate my homework, I need to know how to get the rate tax rate.
According to one of my sorces they told me the answer (tax rate is 48%) They can't tell me the calculation is?
see below:
3-53. Extensions of the CVP Model—Taxes
(LO 3-4)
Central Company manufactures a sensor used in various electronic devices. The product’s price and cost characteristics are:
Required
The company must sell 10,000 units annually in order to earn $187,200 in profits after taxes. What is Central Company’s tax rate?
Actually right answer is tax rate of 48% base on "McGraw-Hill Connect" but I could not figure out how to calculate the to come up to 48% tax rate?
Selling price per unit $ 13 Variable cost per unit 4 Fixed cost per year 540,000Explanation / Answer
Sales (100000*13) 1300000 less variable cost 400,000 cotnribution margin 900,000 less fixed expense -540,000 income before tax 360,000 so tax = 360,000-187,200 172800 tax rate = 172800/360000 0.48 or 48%