Stephanie's Bridal Shoppe sells wedding dresses. The average selling price of each dress is $1,200, variable costs are $700, and fixed costs are $100,000. How many dresses must the Bridal Shoppe sell to yield after-tax net income of $20,000, assuming the tax rate is 40%?

Question

Quizplus · Accepted Answer

1,200N - $700N - $100,000 = $20,000 / (1 - 0.4); $500N - $100,000 = $33,333; N = 267 units

Stephanie's Bridal Shoppe Sells Wedding Dresses