Answer the following questions using the information below:
Assume the following cost information for Fernandez Company:
$\begin{array}{lr}
\text { Selling price } & \$ 120 \text { per unit } \
\text { Variable costs } & \$ 80 \text { per urit } \
\text { Total fixed costs } & \$ 80,000 \
\text { Taxrate } & 40 \%
\end{array}$
-What minimum volume of sales dollars is required to earn an after-tax net income of $30,000?
A) $465,000
B) $330,000
C) $390,000
D) $165,000

Question

Answer the following questions using the information below:
Assume the following cost information for Fernandez Company:
 $\begin{array}{lr}
\text { Selling price } & \$ 120 \text { per unit } \
\text { Variable costs } & \$ 80 \text { per urit } \
\text { Total fixed costs } & \$ 80,000 \
\text { Taxrate } & 40 \%
\end{array}$
-What minimum volume of sales dollars is required to earn an after-tax net income of $30,000?
A) $465,000
B) $330,000
C) $390,000
D) $165,000

Quizplus · Accepted Answer

To find the minimum sales volume required to earn an after-tax net income of $30,000, we first calculate the before-tax income needed: $30,000 / (1 - 0.40) = $50,000. The contribution margin per unit is $120 - $80 = $40. The required sales in units is ($80,000 + $50,000) / $40 = 3,250 units. The sales dollars required is 3,250 units * $120 = $390,000.

Answer the Following Questions Using the Information Below: Assume the Following

Answer the Following Questions Using the Information Below:
Assume the Following