Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Wisdom Company has monthly fixed costs of $600.000. The varlable cost ratio for the firm is 55%, the firm's tax rate is 30%, and the

image text in transcribed
Wisdom Company has monthly fixed costs of $600.000. The varlable cost ratio for the firm is 55%, the firm's tax rate is 30%, and the firm seeks an after tax profit margin of 8%. Please show your work for full credit. 1. What is the monthly amount of revenue to achieve breakeven? 2 What is the monthly amount of revenue to achieve a net operating income to revenue ratio of 15% ? 3. What is the monthly amount of revenue to achieve net income after tax equal to $25.000? 4. Prepare a contribution type income statement (to net income after tax) assuming that revenue equals 180,000 . 5. What is the monthly amount of breakeven if monthiy fixed costs decrease to $520.000 and the variable cost ratio increases to 60%

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Governmental Accounting

Authors: Steven M. Bragg

2022nd Edition

1642210781, 978-1642210781

More Books

Students also viewed these Accounting questions