After-Tax Profit Targets Olivian Company wants to earn $300,000 in net (after-tax) income next year. Its product is priced at $300 per unit. Product costs include: Direct materials $90.00 Direct labor $66.00 Variable overhead $15.00 Total fixed factory overhead $405,000 Variable selling expense is $12 per unit; fixed selling and administrative expense totals $255,000. Olivian has a tax rate of 40 percent. 3. Prepare an income statement for Olivian Company for the coming year based on the number of units computed in Requirement 2. Do NOT round interim calculations and, if required, round your answer to the nearest dollar. Olivian Company Income Statement For the Coming Year Total $fill in the blank fill in the blank $fill in the blank fill in the blank $fill in the blank fill in the blank $fill in the blank 4. What if Olivian had a 35 percent tax rate? Would the units sold to reach a $300,000 target net income be higher or lower than the units calculated in Requirement 2? Calculate the number of units needed at the new tax rate. In your calculations, round before-tax income to the nearest dollar. Round your answer to the nearest whole unit. fill in the blank
After-Tax Profit Targets Olivian Company wants to earn $300,000 in net (after-tax) income next year. Its product is priced at $300 per unit. Product costs include: Direct materials $90.00 Direct labor $66.00 Variable overhead $15.00 Total fixed factory overhead $405,000 Variable selling expense is $12 per unit; fixed selling and administrative expense totals $255,000. Olivian has a tax rate of 40 percent. 3. Prepare an income statement for Olivian Company for the coming year based on the number of units computed in Requirement 2. Do NOT round interim calculations and, if required, round your answer to the nearest dollar. Olivian Company Income Statement For the Coming Year Total $fill in the blank fill in the blank $fill in the blank fill in the blank $fill in the blank fill in the blank $fill in the blank 4. What if Olivian had a 35 percent tax rate? Would the units sold to reach a $300,000 target net income be higher or lower than the units calculated in Requirement 2? Calculate the number of units needed at the new tax rate. In your calculations, round before-tax income to the nearest dollar. Round your answer to the nearest whole unit. fill in the blank
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter16: Cost-volume-profit Analysis
Section: Chapter Questions
Problem 4CE: Olivian Company wants to earn 420,000 in net (after-tax) income next year. Its product is priced at...
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After-Tax Profit Targets
Olivian Company wants to earn $300,000 in net (after-tax) income next year. Its product is priced at $300 per unit. Product costs include:
| Direct materials | $90.00 |
| Direct labor | $66.00 |
| Variable overhead | $15.00 |
| Total fixed factory overhead | $405,000 |
Variable selling expense is $12 per unit; fixed selling and administrative expense totals $255,000. Olivian has a tax rate of 40 percent.
3. Prepare an income statement for Olivian Company for the coming year based on the number of units computed in Requirement 2. Do NOT round interim calculations and, if required, round your answer to the nearest dollar.
| Olivian Company | |
| Income Statement | |
| For the Coming Year | |
| Total | |
| $fill in the blank | |
| fill in the blank | |
| $fill in the blank | |
| fill in the blank | |
| $fill in the blank | |
| fill in the blank | |
| $fill in the blank |
4. What if Olivian had a 35 percent tax rate? Would the units sold to reach a $300,000 target net income be higher or lower than the units calculated in Requirement 2?
Calculate the number of units needed at the new tax rate. In your calculations, round before-tax income to the nearest dollar. Round your answer to the nearest whole unit.
fill in the blank
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