CVP: Before- and After-Tax Targeted IncomeHead-Gear Company produces helmets for bicycle racing. Currently, Head-Gear charges a price of $240 per helmet. Variable costs are $96.00 per helmet, and fixed costs are $1,158,000. The tax rate is 25 percent. Last year, 14,000 helmets weresold.Required:1. What is Head-Gear's net income for last year?2. What is Head-Gear's break-even revenue? In your computations, round the contribution margin ratio to two decimal places.3. Suppose Head-Gear wants to earn before-tax operating income of $915,600. How many units must be sold? Round to the nearest whole unit.units4. Suppose Head-Gear wants to earn after-tax net income of $665,100. How many units must be sold? In your computations, round dollar amounts to the nearest dollar. Round your final answer to the nearest whole unit.units5. Suppose the income tax rate rises to 35 percent. How many units must be sold for Head-Gear to earn after-tax income of $670,020? Round to the nearest whole unit.Units CVP: Before- and After-Tax Targeted IncomeHead-Gear Company produces helmets for bicycle racing. Currently, Head-Gear charges a price of $240 per helmet, Variable costs are $96.00 per helmet, and fixed costs are $1,158,000. The tax rate is 25 percent. Last year, 14,000 helmets weresold.Required:1. What is Head-Gear's net income for last year?2. What is Head-Gear's break-even revenue? In your computations, round the contribution margin ratio to two decimal places.3. Suppose Head-Gear wants to earn before-tax operating income of $915,600. How many units must be sold? Round to the nearest whole unit.units4. Suppose Head-Gear wants to earn after-tax net income of $665,100. How many units must be sold? In your computations, round dollar amounts to the nearest dollar. Round your final answer to the nearest whole unit.units5. Suppose the income tax rate rises to 35 percent. How many units must be sold for Head-Gear to earn after-tax income of $670,020? Round to the nearest whole unit.units

Hi student Since there are multiple subparts, we will answer only first three subparts.

Answered: CVP: Before- and After-Tax Targeted…

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 16E

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CVP: Before- and After-Tax Targeted Income Head-Gear Company produces helmets for bicycle racing. Currently, Head-Gear charges a price of $240 per helmet. Variable costs are $96.00 per helmet, and fixed costs are $1,158,000. The tax rate is 25 percent. Last year, 14,000 helmets were sold. Required: 1. What is Head-Gear's net income for last year? 2. What is Head-Gear's break-even revenue? In your computations, round the contribution margin ratio to two decimal places. 3. Suppose Head-Gear wants to earn before-tax operating income of $915,600. How many units must be sold? Round to the nearest whole unit. units 4. Suppose Head-Gear wants to earn after-tax net income of $665,100. How many units must be sold? In your computations, round dollar amounts to the nearest dollar. Round your final answer to the nearest whole unit. units 5. Suppose the income tax rate rises to 35 percent. How many units must be sold for Head-Gear to earn after-tax income of $670,020? Round to the nearest whole unit. Units

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