After Tax Profit Targets Olivian Company wants to earn $300,000 in net (after tax) income next year Its product is priced at $350 per unit Product costs include Direct materials $105 00 Direct labor $77 00 Variable overhead $17 50 Total fixed factory overhead $440,000 Variable selling expense is $14 per unit fixed selling and administrative expense totals $290,000 Olivian has a tax rate of 40 percent Required Question Content Area 1 Calculate the before tax profit needed to achieve an after tax target of $300,000 $fill in the blank b1996efea06efb3 1 2 Calculate the number of units that will yield operating income calculated in Requirement 1 above If required, round your answer to the nearest whole unit fill in the blank b1996efea06efb3 2 units Question Content Area 3 Prepare an income statement for Olivian Company for the coming year based on the number of units computed in Requirement 2 Do NOT round interim calculations and, if required, round your answer to the nearest dollar Olivian Company Income Statement For the Coming Year Total Contribution marginIncome taxesOperating incomeSalesVariable expense $ Select Income taxesOperating incomeSalesTotal fixed expenseTotal variable expense Select Income taxesOperating incomeSalesTotal contribution marginTotal variable expense $ Select Income taxesOperating incomeSalesTotal fixed expenseTotal variable expense Select Fixed expenseIncome taxesOperating incomeSalesVariable expense $ Select Less Income taxesLess Operating incomeLess SalesAdd Income taxesAdd Sales Select Contribution marginIncome taxesNet incomeNet lossOperating income $ Select Question Content Area 4 What if Olivian had a 35 percent tax rate Would the units sold to reach a $300,000 target net income be higher or lower than the units calculated in Requirement 2 HigherLower Calculate the number of units needed at the new tax rate In your calculations, round before tax income to the nearest dollar Round your answer to the nearest whole unit fill in the blank aecb8a016fa001e 2 units

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After-Tax Profit Targets Olivian Company wants to earn $300,000 in net (after-tax) income next year. Its product is priced at $350 per unit. Product costs

After-Tax Profit Targets

Olivian Company wants to earn $300,000 in net (after-tax) income next year. Its product is priced at $350 per unit. Product costs include:

Direct materials	$105.00
Direct labor	$77.00
Variable overhead	$17.50
Total fixed factory overhead	$440,000

Variable selling expense is $14 per unit; fixed selling and administrative expense totals $290,000. Olivian has a tax rate of 40 percent.

Required:

Question Content Area

1. Calculate the before-tax profit needed to achieve an after-tax target of $300,000. $fill in the blank b1996efea06efb3_1

2. Calculate the number of units that will yield operating income calculated in Requirement 1 above. If required, round your answer to the nearest whole unit. fill in the blank b1996efea06efb3_2 units

Question Content Area

3. Prepare an income statement for Olivian Company for the coming year based on the number of units computed in Requirement 2. Do NOT round interim calculations and, if required, round your answer to the nearest dollar.

**Olivian Company** **Income Statement** **For the Coming Year**
	Total
Contribution marginIncome taxesOperating incomeSalesVariable expense	$- Select -
Income taxesOperating incomeSalesTotal fixed expenseTotal variable expense	- Select -
Income taxesOperating incomeSalesTotal contribution marginTotal variable expense	$- Select -
Income taxesOperating incomeSalesTotal fixed expenseTotal variable expense	- Select -
Fixed expenseIncome taxesOperating incomeSalesVariable expense	$- Select -
Less: Income taxesLess: Operating incomeLess: SalesAdd: Income taxesAdd: Sales	- Select -
Contribution marginIncome taxesNet incomeNet lossOperating income	$- Select -

Question Content Area

4. What if Olivian had a 35 percent tax rate? Would the units sold to reach a $300,000 target net income be higher or lower than the units calculated in Requirement 2?

HigherLower

Calculate the number of units needed at the new tax rate. In your calculations, round before-tax income to the nearest dollar. Round your answer to the nearest whole unit. fill in the blank aecb8a016fa001e_2 units