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Hydro Systems Engineering Associates, Inc. provides consulting services to city water authorities. The consulting firm's contribution- margin ratio is 15 percent, and its annual fixed
Hydro Systems Engineering Associates, Inc. provides consulting services to city water authorities. The consulting firm's contribution- margin ratio is 15 percent, and its annual fixed expenses are $285,000. The firm's income tax rate is 30 percent. Required: 1. Calculate the firm's break-even volume of service revenue. 2. How much before-tax income must the firm earn to make an after-tax net income of $154,000? 3. What level of revenue for consulting services must the firm generate to earn an after-tax net income of $154,000? 4. Suppose the firm's income-tax rate changes to 20 percent. What will happen to the break-even level of consulting service revenue? Complete this question by entering your answers in the tabs below. Req 1 to 3 Reg 4 Calculate the firm's break-even volume of service revenue. How much before-tax income must the firm earn to make an after-tax net income of $154,000? What level of revenue for consulting services must the firm generate to earn an after-tax net income of $154,000? (Do not round intermediate calculations. Round your final answers to the nearest dollar amount.) Break-even volume Before tax income Service revenue
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