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Colorado Furniture Company Manufactures Naturally Weathered Reclaimed Wood Furniture

Question 177

Essay

Colorado Furniture Company manufactures naturally weathered reclaimed wood furniture.A queen-size bed sells for $1,800 and variable costs total $1,080.Colorado incurs $300,000 in fixed costs during the year.The company's tax rate is 20%.
Required:
How many queen-size beds must Colorado sell to generate net income of $300,000?

Correct Answer:

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$300,000 ÷ (1 ̶ .2) = $375,000...

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