Framing House, Inc. produces and sells picture frames. Variable costs are expect

Question

Framing House, Inc. produces and sells picture frames. Variable costs are expected to be $18.00 per frame;fixed costs for the year are expected to total $144,000. The budgeted selling price is $27.00 per frame. The sales dollars required to make a before-tax profit of $22,000 for Framing House are calculated to be: $572,700 $498,000 $522,900 $473,100 $547,800 Framing House, Inc. produces and sells picture frames. Variable costs are expected to be $18.00 per frame; fixed costs for the year are expected to total $144,000. The budgeted selling price is $27.00 per frame. The sales dollars required by Framing House to make an after-tax profit of $11,000, given an income tax rate of 22 percent, are calculated to be (round intermediate calculation(s) to nearest whole number) $469,565 $460,078 $455,335 $464,822 $474,308

Explanation / Answer

1 CM ratio=(27-18)/27 = 33.3333% Sales dollars required=(144000+22000)/33.3333%= $498000 2 Before tax profit=11000/(1-0.22)= $14103 Sales dollars required=(144000+14103)/33.3333%= $474308

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