CVP analysis, income taxes. Brooke Motors is a small car dealership. On average, it sells a car for$27,000, which it purchases from the manufacturer for $23,000. Each month, Brooke Motors pays $48,200 inrent and utilities and $68,000 for salespeople’s salaries. In addition to their salaries, salespeople are paid acommission of $600 for each car they sell. Brooke Motors also spends $13,000 each month for local advertisements.Its tax rate is 40%.Required 1. How many cars must Brooke Motors sell each month to break even?2. Brooke Motors has a target monthly net income of $51,000. What is its target monthly operatingincome? How many cars must be sold each month to reach the target monthly net income of $51,000? 3-21 CVP analysis, income taxes. Brooke Motors is a small car dealership. On average, it sells a car for$27,000, which it purchases from the manufacturer for $23,000. Each month, Brooke Motors pays $48,200 inrent and utilities and $68,000 for salespeople's salaries. In addition to their salaries, salespeople are paid acommission of $600 for each car they sell. Brooke Motors also spends $13,000 each month for local adver-tisements. Its tax rate is 40%.Required1. How many cars must Brooke Motors sell each month to break even?2. Brooke Motors has a target monthly net income of $51,000. What is its target monthly operatingincome? How many cars must be sold each month to reach the target monthly net income of $51,000?|

Break even sales is the sales level at which the firm is able to recover all its costs that is the…

CVP analysis, income taxes. Brooke Motors is a small car dealership. On average, it sells a car for $27,000, which it purchases from the manufacturer for $23,000. Each month, Brooke Motors pays $48,200 in rent and utilities and $68,000 for salespeople’s salaries. In addition to their salaries, salespeople are paid a commission of $600 for each car they sell. Brooke Motors also spends $13,000 each month for local advertisements. Its tax rate is 40%. Required 1. How many cars must Brooke Motors sell each month to break even? 2. Brooke Motors has a target monthly net income of $51,000. What is its target monthly operating income? How many cars must be sold each month to reach the target monthly net income of $51,000?

CVP analysis, income taxes. Brooke Motors is a small car dealership. On average, it sells a car for $27,000, which it purchases from the manufacturer for $23,000. Each month, Brooke Motors pays $48,200 in rent and utilities and $68,000 for salespeople’s salaries. In addition to their salaries, salespeople are paid a commission of $600 for each car they sell. Brooke Motors also spends $13,000 each month for local advertisements. Its tax rate is 40%. Required 1. How many cars must Brooke Motors sell each month to break even? 2. Brooke Motors has a target monthly net income of $51,000. What is its target monthly operating income? How many cars must be sold each month to reach the target monthly net income of $51,000?

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter5: Sales And Receivables

Section: Chapter Questions

Problem 60E: Calculation of Revenue Wallace Motors buys and sells used cars. Wallace made the following sales...

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Calculation of Revenue Wallace Motors buys and sells used cars. Wallace made the following sales during January and February: a. Three cars were sold to Russell Taxi for a total of $75,000; the cars were delivered to Russell on January 18. Russell paid Wallace $20,000 on January 18 and the remaining $55,000 on February 12. b. One car was sold to Hastings Classics for $28,000. The car was delivered to Hastings on January 25. Hastings paid Wallace on February 1. Required: Calculate the monthly revenue for Wallace for January and February.
1. Suppose the gross sales of Lukah’s Coffee Shop for the month of April is Php 50,000. How much is its gross profit? A. 50,000 B. 32,000 C. 20,500 D. 38,500 2. How about its income before tax? A. 50,000 B. 32,000 C. 20,500 D. 38,500 3. Suppose the government imposes a 5% income tax on all businesses earning an income worth Php 50,000 and below. Solve for the income after tax of Lukah’s Coffee Shop. A. 30,400 B. 32,000 C. 20,000 D. 19,475 4. Now, suppose the rent expense increased from Php 3,500 to Php 4,000. What is now the income before tax of Lukah’s Coffee Shop? A. 30,400 B. 32,000 C. 20,000 D. 19,475 5. Given the change in the gross profit due to an increase in the cost of rental space, how much, then, is the income after tax of Lukah’s Coffee Shop? A. 30,400 B. 32,000 C. 20,000 D. 19,000
QUESTION ONE A person managing a dry- cleaning store for $ 30,000 per year decides to open a new one. The revenues of the store during the first year of operation are $ 100,000 and the expenses are $ 10,000 for supplies, $ 35,000 for salaries, $ 8,000 for rent, and $ 2,000 for utilities. The person also used $5,000 for interest on a bank loan. Assume that income and business taxes are zero and the repayment of the principal of the loan does not start before three years (suppose r=10%). Calculate (a) the explicit cost (b) the implicit costs (c) the business profit, (d) the Economic profit (e) should he open the dry-cleaning store or not? Explain your answer.
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1.Jill is paid a yearly salary of $90,000. How does she make per month? 2. A salesman is paid a 6% commission on his net sales. Find his gross wages for the past month if his gross sales totaled $91,568 and he had $5,568 of returns and allowances. 3. A salesman receives a salary of $500 per week plus an 8% commission on all sales in excess of $1,800. What were his wages last week, if gross sales totaled $18,714 and returns were $5,714? Group of answer choices A.$1,481.12 B.$1,981.12 C.$1,040 D.$1,396 4. An auctioneer earns a commission on the total value of the property he sells. If he earns $2,700 on the sale of $18,000 worth of property, at what percentage rate is he paid? Group of answer choices A.0.15% B.15% C.1.5% D.1 1/2% 5. A computer programmer, who is covered by the Fair Labor Standards Act, is paid a salary of $1,260 a week for a normal work week of 35 hours. If she works 42 hours in a week, her gross pay for the week would be Group…
In providing accounting services to small businesses, you encounter the following situations. 1. Grainger Corporation rings up cash sales and sales taxes separately on its cash register. On April 10, the register totals are pre-tax sales of sales $5,200 plus GST of $300 and PST of $400. 2. Darby Corporation receives its annual property tax bill in the amount of $8,100 on May 31. 3. (i) During the month of March, Neufeld Corporation’s employees earned gross salaries of $60,400. Withholdings deducted from employee earnings related to these salaries were $2,950 for CPP, $1,068 for EI, $7,780 for income taxes, and $370 for union dues. (ii) Neufeld’s payroll costs for the week were $2,950 for CPP and $1,495 for EI. Prepare the journal entries to record the above transactions. (Round answers to 0 decimal places, e.g. 5,275.) Sr no. Account Titles and Explanation Debit Credit 1. 2. 3…
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Big Buy Appliances sells Mike and Katy a refrigerator for $1,200 in March. Big Buy paid $500 for the refrigerator in Feburary. Big Buy received a 900 payment from Mike and Katy in March and will receive an additional 300 in April. If Big Buy uses the Accrual Basis of Accounting then the gross profit rate for the month of March would bea. 500b. 800c. 900d. 700
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