Use the following information for following questions

Bijoux Ltd manufactures and sells a single product. This product has the following operational data:

$\begin{array}{lr}
\text { Unit sales price } & 50 \
\text { Variable manufacturing cost per unit } & 25 \
\text { Fixed manufacturing costs } & 72,000 \
\text { Variable selling cost per unit } & 2 \
\text { Fixed selling costs } & 57,000 \
\text { Marginal tax rate } & 20 \%
\end{array}$
-Calculate the sales revenue required to achieve a post-tax profit of $125 000.
A) 11 410
B)9 924
C) 5 705
D) 12 403

Question

Use the following information for following questions

Bijoux Ltd manufactures and sells a single product. This product has the following operational data:

$\begin{array}{lr}
\text { Unit sales price } & 50 \
\text { Variable manufacturing cost per unit } & 25 \
\text { Fixed manufacturing costs } & 72,000 \
\text { Variable selling cost per unit } & 2 \
\text { Fixed selling costs } & 57,000 \
\text { Marginal tax rate } & 20 \%
\end{array}$
-Calculate the sales revenue required to achieve a post-tax profit of $125 000.
A) 11 410
B)9 924
C) 5 705
D) 12 403

Quizplus · Accepted Answer

To calculate the sales revenue required to achieve a post-tax profit of $125,000, we first need to determine the pre-tax profit needed. Since the marginal tax rate is 20%, and we want a post-tax profit of $125,000, we use the formula: Pre-tax Profit = Post-tax Profit / (1 - Tax Rate). So, Pre-tax Profit = $125,000 / (1 - 0.20) = $125,000 / 0.80 = $156,250. Next, we calculate the total profit needed before taxes, including fixed costs. Total profit needed = Pre-tax Profit + Fixed Manufacturing Costs + Fixed Selling Costs = $156,250 + $72,000 + $57,000 = $285,250. To achieve this total profit, we calculate the required sales revenue. The contribution margin per unit = Sales Price per Unit - Variable Costs per Unit = $50 - ($25 + $2) = $23. The number of units needed to cover the total profit and fixed costs = Total Profit Needed / Contribution Margin per Unit = $285,250 / $23 ≈ 12402.17 units. Finally, the sales revenue required = Number of Units * Sales Price per Unit = 12402.17 * $50 ≈ $620,108.50. However, none of the provided options match this calculation, suggesting a misunderstanding in the question's provided options or a mistake in the calculation process.

Use the Following Information for Following Questions Bijoux

Use the Following Information for Following Questions

Bijoux