The Blue Saints Band is holding a concert in Toronto. Fixed costs relating to staging a concert are $350,000. Variable costs per patron are $5.00. The selling price for a tickets $25.00. The Blue Saints Band has sold 23,000 tickets so far. How many tickets does the Blue Saints Band need to sell to achieve net income of $50,000 after income tax, assuming the income tax rate is 50%?
A)2,500
B)18,000
C)22,500
D)17,500

Question

Quizplus · Accepted Answer

Target volume (units) = (Fixed cost + (target net income/(1 - tax rate)) / Unit contribution margin.
Target volume = ($350,000 + ($50,000 / (1 - .5) / ($25 - $5)
Target volume = $350,000 + $100,000 / $20 = 22,500 tickets

The Blue Saints Band Is Holding a Concert in Toronto