• Yosemite Enterprises desires to earn an after-tax income of $150,000. It has fixed costs of $1,000,000, a unit sales price of $500, and unit variable costs of $200. The company is in the 30% tax bracket.

  1. How many dollars of sales revenue must be earned to achieve the after-tax profit of $150,000?

  2. How many dollars of revenue would have to be earned to achieve $150,000 of profit, if there had been no income tax?

1. Dollars of Sales Revenue Needed to Achieve Target Net Income a b. Target net income 1 - Tax rate (a) + (b) Fixed costs (c) + (d) Contribution margin ratio d. f. 2. Dollars of Sales Revenue Needed to Achieve Target Net Income a. b. C. d. Target net income Fixed costs (a) (b) Contribution margin ratio (c) + (d)