TechMed Co. manufactures a device that measures the oxygen concentration in patients' blood. This device is sold to hospitals and medical labs around the country. TechMed has compiled the following financial data for the past 4 months:
TechMed sells each device for the same amount. Net income in November was $2,600. TechMed's tax rate is 20%.
If TechMed wants to generate after-tax net income of $6,500 in January, what is the dollar amount of sales that TechMed must generate? Use the high-low method to determine variable and fixed costs. Then, calculate the target sales dollars. (Round intermediate calculations to four decimal places.)

Question

TechMed Co. manufactures a device that measures the oxygen concentration in patients' blood. This device is sold to hospitals and medical labs around the country. TechMed has compiled the following financial data for the past 4 months:
  TechMed sells each device for the same amount. Net income in November was $2,600. TechMed's tax rate is 20%.
If TechMed wants to generate after-tax net income of $6,500 in January, what is the dollar amount of sales that TechMed must generate? Use the high-low method to determine variable and fixed costs. Then, calculate the target sales dollars. (Round intermediate calculations to four decimal places.)

Quizplus · Accepted Answer

The Answer of TechMed Co. manufactures a device that measures the oxygen concentration in patients' blood. This device is sold to hospitals and medical labs around the country. TechMed has compiled the following financial data for the past 4 months:
  TechMed sells each device for the same amount. Net income in November was $2,600. TechMed's tax rate is 20%.
If TechMed wants to generate after-tax net income of $6,500 in January, what is the dollar amount of sales that TechMed must generate? Use the high-low method to determine variable and fixed costs. Then, calculate the target sales dollars. (Round intermediate calculations to four decimal places.)