Eugene's Environmental Consulting Service LLP had the following operating results last month: Service revenues amounted to $25,000, variable costs were $12,000, and fixed costs were $10,000 for the month. Eugene has a 40% tax rate. Based on this information, which of the following statements is correct?

Question

Quizplus · Accepted Answer

Service revenues of $25,000 F1F1F1S1?F1F1F10 variable costs of $12,000 = contribution margin of $13,000. Contribution margin of $13,000 F1F1F1S1?F1F1F10 $10,000 of fixedcosts = operating profit of $3,000 last month. At a tax rate of 40%, this would result in taxes of 0.4 × $3,000 = $1,200, leaving a total of net income aftertaxes of $1,800.

Eugene's Environmental Consulting Service LLP Had the Following Operating Results