Question
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
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 $1,152,000. 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? $fill in the blank 1
2. What is Helmet-Pro's break-even revenue? In your computations, round the contribution margin ratio to two decimal places. $fill in the blank 2
3. Suppose Helmet-Pro wants to earn before-tax operating income of $936,000. How many units must be sold? Round to the nearest whole unit. fill in the blank 3 units
4. Suppose Helmet-Pro wants to earn after-tax net income of $669,600. 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. fill in the blank 4 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 $664,560? Round to the nearest whole unit. fill in the blank 5 units
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