Lorna Corporation has determined the contribution margin ratio is 35% and the income tax rate is 40%.
Required:
A) Assume break-even volume in dollars is $1,500,000. What are total fixed costs?
B) Assume Lorna Corporation wants after-tax net income of $300,000. What volume of sales in dollars is necessary to achieve this net income?

Question

Quizplus · Accepted Answer

The Answer of Lorna Corporation has determined the contribution margin ratio is 35% and the income tax rate is 40%.
Required:
A) Assume break-even volume in dollars is $1,500,000. What are total fixed costs?
B) Assume Lorna Corporation wants after-tax net income of $300,000. What volume of sales in dollars is necessary to achieve this net income?

Lorna Corporation Has Determined the Contribution Margin Ratio Is 35