Stephanie's Bridal Shoppe sells wedding dresses.The average selling price of each dress is $1,000,variable costs are $400,and fixed costs are $90,000.How many dresses must the Bridal Shoppe sell to yield after-tax net income of $18,000,assuming the tax rate is 40%?

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Explanation:Contribution Margin = $1,000 - $400 = $600Contribution Margin Ratio = $600/$1,000 = 60%Break-even Sales = $90,000/60% = $150,000Sales to yield after-tax net income of $18,000 = $150,000 + ($18,000/(1-40%)) = $200,000Number of dresses = $200,000/$1,000 = 200 dresses

Stephanie's Bridal Shoppe Sells Wedding Dresses