Frank's Auto Supply Company sells cases of gaskets for $140.The unit variable costs per case are $65 plus a selling commission of 10 percent of sales.Fixed costs are $2,500 per month The company has a tax rate of 25%.Required:
a.What is the contribution margin per case?
b.What is the break-even point in cases?
c.How many cases must be sold to earn pre-tax profit of $9,000?
d.How many cases must be sold to earn an after-tax income of $9,000?

Question

Quizplus · Accepted Answer

The Answer of Frank's Auto Supply Company sells cases of gaskets for $140.The unit variable costs per case are $65 plus a selling commission of 10 percent of sales.Fixed costs are $2,500 per month The company has a tax rate of 25%.Required:
a.What is the contribution margin per case?
b.What is the break-even point in cases?
c.How many cases must be sold to earn pre-tax profit of $9,000?
d.How many cases must be sold to earn an after-tax income of $9,000?

Frank's Auto Supply Company Sells Cases of Gaskets for $140