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CVP: Before- and After-Tax Targeted Income Helmet-Pro Company produces helmets for bicycle racing. Currently, Helmet-Pro charges a price of $240 per helmet. Variable costs are
CVP: Before- and After-Tax Targeted Income Helmet-Pro Company produces helmets for bicycle racing. Currently, Helmet-Pro charges a price of $240 per helmet. Variable costs are $96.00 per helmet, and fixed costs are $1,164,000. The tax rate is 25 percent. Last year, 14,000 helmets were sold. Required: 1. What is Helmet-Pro's net income for last year? 2. What is Helmet-Pro's break-even revenue? In your computations, round the contribution margin ratio to two decimal places. 3. Suppose Helmet-Pro wants to earn before-tax operating income of $924,000. How many units must be sold? Round to the nearest whole unit. units 4. Suppose Helmet-Pro wants to earn after-tax net income of $649,800. How many units must be sold? In your computations, round dollar amounts to the nearest dollar. Round your final answer to the nearest whole unit. units 5. Suppose the income tax rate rises to 35 percent. How many units must be sold for Helmet-Pro to earn after-tax income of $656,760? Round to the nearest whole unit. units
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