(d) With the current cost structure, including fixed costs of $266,000, what dollar sales volume is required to provide an after-tax net income of $250,000?Do not round until your final answer. Round your answer up to the nearest dollar.$(e) Prepare an abbreviated contribution income statement to verify that the solution to part (d) will provide the desired after-tax income.Round your answers to the nearest dollar. Use rounded answers for subsequent calculations. Do not use negative signs with any of your answers.WIGGINS PROCESSING COMPANYIncome StatementFor the Year 2008$SalesVariable costsContribution marginFixed costsNet income before taxesIncome taxes (37%)Net income after taxes $Check Multiple Product Planning with TaxesIn the year 2008, Wiggins Processing Company had the following contribution income statement:WIGGINS PROCESSING COMPANYContribution Income StatementFor the Year 2008SalesVariable costsCost of goods soldSelling and administrativeContribution marginFixed CostsFactory overheadSelling and administrativeBefore-tax profitIncome taxes (37%)After-tax profit$1,000,000$420,000200,000 (620,000)380,000186,00080,000 (266,000)114,000(42,180)$71,820HINT: Round contribution margin ratio to two decimal places for your calculations below.(a) Determine the annual break-even point in sales dollars.$(b) Determine the annual margin of safety in sales dollars.$(c) What is the break-even point in sales dollars if management makes a decision that increases fixed costs by $76,000?

Contribution margin ratio = Contribution/ total sales Contribution= Sales - Variable cost

d) With the current cost structure, including fixed costs of $266,000, what dollar sales volume is required to provide an after-tax net income of $250,000? Do not round until your final answer. Round your answer up to the nearest dollar. e) Prepare an abbreviated contribution income statement to verify that the solution to part (d) will provide the desired after-tax income. tound your answers to the nearest dollar. Use rounded answers for subsequent calculations. Do not use negative signs with any of your answers. WIGGINS PROCESSING COMPANY Income Statement For the Year 2008 $ Sales Variable costs Contribution margin Fixed costs Net income before taxes Income taxes (3796) Net income after taxes $ Check

d) With the current cost structure, including fixed costs of $266,000, what dollar sales volume is required to provide an after-tax net income of $250,000? Do not round until your final answer. Round your answer up to the nearest dollar. e) Prepare an abbreviated contribution income statement to verify that the solution to part (d) will provide the desired after-tax income. tound your answers to the nearest dollar. Use rounded answers for subsequent calculations. Do not use negative signs with any of your answers. WIGGINS PROCESSING COMPANY Income Statement For the Year 2008 $ Sales Variable costs Contribution margin Fixed costs Net income before taxes Income taxes (3796) Net income after taxes $ Check

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter6: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 6PB: Contribution margin, break-even sales, cost-volume-profit chart, margin of safety, and operating...

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