Management anticipates fixed costs of $72,500 and variable costs equal to 40% of

Question

Management anticipates fixed costs of $72,500 and variable costs equal to 40% of sales. What will pretax income equal if sales are $325,000?

A. $57,500
B. $122,500
C. $130,000
D. $181,250
E. $252,500

Please Explain

Roger's Company has total fixed costs of $112,000. Its product sells for $35 per unit and variable costs amount to $25 per unit. Next year Roger's Company wihses to earn a pretax income that equals 10% of fixed costs. How many units must be sold to achieve this target income level?

A. 1,120
B. 8,214
C. 11,200
D. 12,320
E. 14,080

Please Explain

Explanation / Answer

Pretax income equals 325,000- .40*325,000- 72,500= 122,500 (B) x* (35-25)- 112,000= .10*112,000 x= 12,320 (D)

Related Questions

Navigate

• Browse (All)
• Browse M
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.