In 2016, Samantha's Bath and Body Shop had variable costs of $27,000, fixed costs of $18,000, and a net loss of $4,500.
The annual sales volume required for Samantha's to have a beforetax income of $18,000 is

Question

In 2016, Samantha's Bath and Body Shop had variable costs of $27,000, fixed costs of $18,000, and a net loss of $4,500.
The annual sales volume required for Samantha's to have a before­tax income of $18,000 is

Quizplus · Accepted Answer

To find the required sales volume, calculate the total costs (variable + fixed) and add the desired before-tax income. Total costs = $27,000 + $18,000 = $45,000. Desired income = $18,000. Total required revenue = $45,000 + $18,000 = $63,000. Since the net loss was $4,500, the break-even sales were $45,000 - $4,500 = $40,500. Therefore, the required sales volume is $63,000 + $63,000 - $40,500 = $126,000.

In 2016, Samantha's Bath and Body Shop Had Variable Costs