AM.201. Computing Sales for a Desired After-Tax ProfitAssume that last year, Cliff Consulting, a firm in Berkeley, CA, had the following contribution income statement.CLIFF CONSULTINGContribution Income StatementFor the Year Ended September 30Sales revenueVariable costsCost of servicesSelling and administrativeContribution marginFixed costs-selling and administrativeBefore-tax profitIncome taxes 21%After-tax profit$2,400,000$960,000120,000 1,080,0001,320,000880,000440,00092,400$347,600a. With the current cost structure, including fixed costs of $880,000, what dollar sales revenue is required to provide an after-tax net profit of $250,000?Note: Round up to the nearest dollar, enter $80 for $79.2$ 2,175,374xb. Prepare an abbreviated contribution income statement to verify that the solution to requirement a will provide the desired after-tax profit.Note: Round all answers to the nearest dollar, enter $49 for $49.3, or $50 for $49.7Contribution Income StatementSales revenueVariable costsContribution marginFixed costsNet income before taxesIncome taxes (21%)Net income after taxes5÷ $0x0 x$1,196,456 ✔880,000 ✔S0 x# $0 x$250,000

Part 2: Explanation:Step 1: Calculate the before-tax profit needed to achieve the desired after-tax…

Answered: Computing Sales for a Desired After-Tax…

Financial And Managerial Accounting

15th Edition

ISBN:9781337902663

Author:WARREN, Carl S.

Publisher:WARREN, Carl S.

Chapter21: Variable Costing For Management analysis

Section: Chapter Questions

Problem 4PB: Salespersons report and analysis Pachec Inc. employs seven salespersons to sell and distribute its...

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Salespersons report and analysis Pachec Inc. employs seven salespersons to sell and distribute its product throughout the state. Data taken from reports received from the salespersons during the year ended June 30 are as follows: Instructions 1. Prepare a table indicating contribution margin, variable cost of goods sold as a percent of sales, variable selling expenses as a percent of sales, and contribution margin ratio by salesperson. 2. Which salesperson generated the highest contribution margin ratio for the year and why? 3. Briefly list factors other than contribution margin that should be considered in evaluating the performance of salespersons.
Salespersons report and analysis Walthman Industries Inc. employs seven salespersons to sell and distribute its product throughout the state. Data taken from reports received from the salespersons during the year ended December 31 are as follows: Instructions 1. Prepare a table indicating contribution margin, variable cost of goods sold as a percent of sales, variable selling expenses as a percent of sales, and contribution margin ratio by salesperson. (Round whole percent to one digit after decimal point.) 2. Which salesperson generated the highest contribution margin ratio for the year and why? 3. Briefly list factors other than contribution margin that should be considered in evaluating the performance of salespersons.
A company uses charging rates to allocate service department costs to the using departments. The accountant compiled the following information on one of the service departments: If Department K plans to use 1,350 hours of the service departments service in the coming year, how much of the service departments cost is allocated to Department K? a. 3,375 b. 27,300 c. 26,325 d. 23,950
R&R Tax Service offers tax and consulting services to individuals and small businesses. Data for fees andcosts of three types of tax returns follow. R&R provides services in the ratio of 5:3:2 (easy, moderate,business). Fixed costs total $18,000 for the tax season. Use this information to determine the (1) sellingprice per composite unit, (2) variable costs per composite unit, (3) break-even point in composite units,and (4) number of units of each product that will be sold at the break-even point.Type of Return Fee Charged Variable Cost per ReturnEasy (Form 1040EZ) . . . . . . . . . . . . . . $ 50 $ 30Moderate (Form 1040) . . . . . . . . . . . . 125 75Business . . . . . . . . . . . . . . . . . . . . . . . . 275 100
Compute the income after income tax given the following: Net Sales of 100,00,00.00; Marketing Expense of 5,000,000.00; Tax Rate of 30%. Based on the latest income statement, revenue is 500,000,000.00; COGS is 400,000,000.00 and operating expense amounted to 40,000,000.00. Income after income tax is _____.
*CAN YOU ANSWER PARTS 4-7* The contribution format income statement for Huerra Company for last year is given below: Total Unit Sales $ 992,000 $ 49.60 Variable expenses 595,200 29.76 Contribution margin 396,800 19.84 Fixed expenses 318,800 15.94 Net operating income 78,000 3.90 Income taxes @ 40% 31,200 1.56 Net income $ 46,800 $ 2.34 The company had average operating assets of $492,000 during the year. Required: 1. Compute the company’s return on investment (ROI) for the period using the ROI formula stated in terms of margin and turnover. For each of the following questions, indicate whether the margin and turnover will increase, decrease, or remain unchanged as a result of the events described, and then compute the new ROI figure. Consider each question separately, starting in each case from the data used to compute the original ROI in (1) above. 2. Using Lean Production, the company is able to reduce the average level of…
Tally Corp. sells tax software to aid individuals in completing their state and federal tax returns. During the current year, 11,000 software packages were sold resulting in $440,000 of sales revenue, $135,000 of variable costs, and $52,000 of fixed costs. If sales increase by $100,000: Total variable costs will Increase/decrease/stay the same by $ Total fixed costs will Increase/decrease/stay the same by $ Operating income will Increase/decrease/stay the same by $
The GAAP income statement for Carla Vista Company for the year ended December 31, 2022,s shows sale $930,000, cost of good sold $555,000, and operating expenses $235,000. Assuming all costs and expenses are 70% variable and 30% fixed, prepare a CVP income statement through contribution margin.
The information provided below was taken from the records of Chotoo Projects for the financialyear ended 31 May 2020.Extract of statement of comprehensive income for the year ended 31 May 2020RRevenue 480 000Direct costs 240 000Rent income 150 000Advertising 4 800Salaries and wages 90 000Rates and taxes 1 200Other operating expenses 80 000Additional information1. Revenue is calculated as direct cost plus 25%.2. Revenue is divided equally each month. Revenue is expected to increase by 18% for thefinancial year ending 31 May 2021.POSTGRADUATE DIPLOMA IN PROJECT MANAGEMENT – ACADEMIC AND ASSESSMENT CALENDARREGENT BUSINESS SCHOOL (RBS) January 2021 173. Fifty percent (50%) of the revenue is for cash and the balance is on credit. Debtorsnormally pay their accounts as follows:• 40% in the month of the invoice, and these debtors are entitled toa 5% discount;• 55% one month after the invoice;The balance is usually written off as bad debts.4. Purchases for June and July are expected to be 30…
Revenue and expense data for Innovation Quarter Inc. for two recent years are as follows: Current Year Previous YearSales $4,000,000 $3,600,000Cost of goods sold 2,280,000 1,872,000Selling expenses 600,000 648,000Administrative expenses 520,000 360,000Income tax expense 240,000 216,000a. Prepare an income statement in comparative form, stating each item for both years as a percent of sales. Round to the nearest whole percentage.b. Comment on the significant changes disclosed by the comparative income statement.
Multiple Product Planning with TaxesIn the year 2017, Pyramid Consulting had the following contribution income statement: PYRAMID CONSULTINGContribution Income StatementFor the Year 2017 Sales revenue $ 1,300,000 Variable costs Cost of services $ 420,000 Selling and administrative 200,000 (620,000) Contribution margin 680,000 Fixed Costs -selling and administrative (285,000) Before-tax profit 395,000 Income taxes (36%) (142,200) After-tax profit $ 252,800 With the current cost structure, including fixed costs of $285,000, what dollar sales revenue is required to provide an after-tax net income of $200,000? Use rounded contribution margin (2 decimal places) for calculation. Round your answer to the nearest dollar. check_circle
Multiple Product Planning with TaxesIn the year 2017, Pyramid Consulting had the following contribution income statement: PYRAMID CONSULTINGContribution Income StatementFor the Year 2017 Sales revenue $ 1,300,000 Variable costs Cost of services $ 420,000 Selling and administrative 200,000 (620,000) Contribution margin 680,000 Fixed Costs -selling and administrative (285,000) Before-tax profit 395,000 Income taxes (36%) (142,200) After-tax profit $ 252,800 a) Determine the annual break-even point in sales revenue. Round contribution margin ratio to two decimal places for your calculation. Round final answer to nearest dollar. (b) Determine the annual margin of safety in sales revenue. Use rounded answer from above for calculation. (c) What is the break-even point in sales revenue if management makes a decision that increases fixed costs by $57,000? Use rounded contribution margin ratio (2 decimal places) for your calculation. (d) With the…

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