Question

X Company's accountant has developed the following budgeted revenue and cost functions for 2020: R =...

X Company's accountant has developed the following budgeted revenue and cost functions for 2020:

  • R = $30.12X
  • C = $20.37X + $325,000

where R is revenue, C is total cost, and X is units sold.

Assuming a tax rate of 30%, how many units must X Company sell in 2020 in order to earn $276,000 after taxes?

Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Net Profit Before Taxes = Net Profit After Taxes / (1 - Tax Rate)

Net Profit After Taxes = $ 276,000

Tax Rate = 30%

1- Tax Rate = 1 - 30% = 70%

Net Profit Before Taxes = ?

Net Profit Before Taxes = 276,000 * 100/70

Net Profit Before Taxes = $ 394,286

Calculation of Units to be sold to earn Net Profit Before Taxes of $ 394,826

Net Profit Before Taxes = R - C

Where

R stands for Revenue

C stands for Total Cost

X stands for Units Sold

R = 30.12X

C = 20.37 X + 325,000

Net Profit Before Taxes = 30.12 - (20.37X + 325,000)

394,286 = 30.12 X - 20.37 X - 325,000

394,286 + 325,000 = 9.75X

9.75 X = 719,286

X = 719,286 / 9.75

X = 73,773 Units

Units Required to be sold to earn Target Profit of $ 276,000 after Taxes = 73,773 Units

Answer being rounded off due to fraction.

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
In 2019, X Company's profits after taxes were $200,000. In 2020, the selling price was expected...
In 2019, X Company's profits after taxes were $200,000. In 2020, the selling price was expected to be $40.50, the variable cost per unit was expected to be $24.30, and total fixed costs were expected to be $190,000. Assuming a tax rate of 38%, how many units must X Company sell in 2020 in order to earn profit of $209,000?
In 2019, X Company's profits after taxes were $193,000. In 2020, the selling price was expected...
In 2019, X Company's profits after taxes were $193,000. In 2020, the selling price was expected to be $44.00, the variable cost per unit was expected to be $26.00, and total fixed costs were expected to be $190,000. Assuming a tax rate of 36%, how many units must X Company sell in 2020 in order to earn profit of $207,000?
9.   In 2018, X Company's revenue-based profit function was 0.39R - $65,300. Only one change is...
9.   In 2018, X Company's revenue-based profit function was 0.39R - $65,300. Only one change is expected in 2019, a 10% increase in total fixed costs. What must revenue be in 2019 for X Company to earn $37,000? 10. In 2018, X Company sold 7,000 units of its only product for $36.10 each. Unit costs were as follows: Variable manufacturing $14.10 Fixed manufacturing 3.25 Variable selling 4.28 Fixed selling 2.37 Total 24.00 In 2019, the selling price, variable costs per...
The revenue and cost functions for a particular product are given below. The cost and revenue...
The revenue and cost functions for a particular product are given below. The cost and revenue are given in dollars, and x represents the number of units . R(x) = −0.2x2 + 146x C(x) = 66x + 7980 (a) How many items must be sold to maximize the revenue? (b) What is the maximum revenue? (c) Find the profit function. P(x) =   −.2x2+212x+7980 (d) How many items must be sold to maximize the profit? (e) What is the maximum profit?...
The following are the budgeted profit functions for X Company's two products, A and B, next...
The following are the budgeted profit functions for X Company's two products, A and B, next year: Product A:   P = .40 (R) - $27,970 Product B:   P = .45 (R) - $59,080 where R is revenue. Budgeted revenue for the two products are $86,000 and $94,000, respectively. Unavoidable fixed costs for the two products are $10,908 and $24,814, respectively. The company is considering dropping Product B; if it does, the resulting freed-up resources can be used to increase revenue...
The following are the budgeted profit functions for X Company's two products, A and B, next...
The following are the budgeted profit functions for X Company's two products, A and B, next year: Product A: P = .42 (R) - $30,720 Product B: P = .48 (R) - $58,210 where R is revenue. Budgeted revenue for the two products are $88,000 and $88,000, respectively. Unavoidable fixed costs for the two products are $10,752 and $24,448, respectively. The company is considering dropping Product B; if it does, the resulting freed-up resources can be used to increase revenue...
The following are the budgeted profit functions for X Company's two products, A and B, next...
The following are the budgeted profit functions for X Company's two products, A and B, next year: Product A:   P = .45 (R) - $58,720 Product B:   P = .42 (R) - $26,420 where R is revenue. Budgeted revenue for the two products are $86,000 and $93,000, respectively. Unavoidable fixed costs for the two products are $21,726 and $11,889, respectively. The company is considering dropping Product A; if it does, the resulting freed-up resources can be used to increase revenue...
Given cost and revenue functions and C(q)=112q+31000 R(q)=−3q2+3000q​, how many items must the company produce and...
Given cost and revenue functions and C(q)=112q+31000 R(q)=−3q2+3000q​, how many items must the company produce and sell to earn a profit of $131,480
Given the revenue and cost functions R = 26x - 0.3x2 and C = 3x +...
Given the revenue and cost functions R = 26x - 0.3x2 and C = 3x + 10, where x is the daily production, find the rate of change of profit with respect to time when 20 units are produced and the rate of change of production is 7 units per day per day.
A company's revenue from selling x units of an item is given as R=1900x−2x^2. If sales...
A company's revenue from selling x units of an item is given as R=1900x−2x^2. If sales are increasing at the rate of 50 units per day, how rapidly is revenue increasing (in dollars per day) when 360 units have been sold? ? dollars per day The cost of producing x units of stuffed alligator toys is C(x)=0.002x^2+7x+5000. Find the marginal cost at the production level of 1000 units. ? dollars/unit Suppose a product's revenue function is given by R(q)=−7q^2+600q ,...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT