Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Calculator Cost-Volume-Profit, Margin of Safety Steven Kissick is a Kingston-based lawyer who has been in practice for several years. He knew that it would take
Calculator Cost-Volume-Profit, Margin of Safety Steven Kissick is a Kingston-based lawyer who has been in practice for several years. He knew that it would take some time to establish himself and hopefully generate enough revenue to make a decent living. His financial statements for his year ended June 30, 2018, are as follows: Steven Kissick, Lawyer Income Statement For the year ended June 30, 2018 $180,000 Revenue Direct Costs of Practice: Variable 66,000 Fixed 8,000 Gross Margin $26,000 Indirect Costs of Practice: Variable 17,500 Fixed 110,000 Operating Income/(Loss) ($101,500) Income Tax (27.5%) ($101,500) Net Loss Required: Round the contribution margin perocentage to two decimal places and use in subsequent computations. Round your final answers to the nearest dollar. 1. How much revenue must Kissick generate to break even? %$4 2. How much revenue must Kissick generate to generate after-tax income of $150,000? 3. If his billing rate is $350 per hour, is the answer for Requirement 2 reasonable
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started