Question
Klean N Kind Corporation sells one product which has a sales price of $250 each. The company operates with variable costs for this one product
Klean N Kind Corporation sells one product which has a sales price of $250 each. The company operates with variable costs for this one product of $200 per unit. The companys monthly fixed costs are $15,000. The applicable tax rate is 20%. Required: Using the Contribution Margin approach perform the following: 1. Calculate the contribution margin per unit. 2. Given a desired after tax profit of $68,000, compute the before tax profit. 3. Calculate the sales units needed to achieve the after-tax profit of $68,000. 4. Compute the contribution margin ratio. 5. Using your answer to Part 4, calculate the dollar sales needed to achieve an after-tax profit of $68,000.
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