After-Tax Profit Targets Olivian Company wants to earn $480,000 in net (after-tax) income next year. Its product is priced at $400 per unit. Product costs include: Direct materials $120.00 Direct labor $88.00 Variable overhead $20.00 Total fixed factory overhead $410,000 Variable selling expense is $16 per unit; fixed selling and administrative expense totals $260,000. Olivian has a tax rate of 40 percent.

1. Calculate the before-tax profit needed to achieve an after-tax target of $480,000. $fill in the blank 8e96c006302b02f_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 8e96c006302b02f_2 units

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 -

4. What if Olivian had a 35 percent tax rate? Would the units sold to reach a $480,000 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 24db4b00205ef91_2 units