Aqua Systems Engineering provides consulting services to city water authorities. A recent income stateand Taxes ment revealed
Question:
Aqua Systems Engineering provides consulting services to city water authorities. A recent income stateand Taxes ment revealed variable costs of $740,000 on a sales level of $1,000,000. Annual fixed expenses are
(LO 3, 4) y $200,000, and the firm’s income tax rate is 35 percent. A bo Y ee ON 2 Required [2.8 S740 =O be 200002 ae,
a. Calculate the firm’s break-even volume of service revenue. Get wai u b he 3/
(Gocoeec s v¥$21$% LE
b. How much before-tax income must the firm earn to make an after-tax net income of $100,000?
if
c. What level of revenue must the firm generate to earn an after-tax net income of $100,000?
Qocorx +1S554 an : ;
SS SS 4
d. Suppose the firm’s income tax rate rises to 40 percent. What will happen to thé break-even level pf ae a ofl consulting revenue?
Step by Step Answer:
Cost Management Strategies For Business Decisions
ISBN: 12
4th Edition
Authors: Ronald Hilton, Michael Maher, Frank Selto