Dalton Brothers pay 15 in taxes on income between 1
Dalton Brothers pay 15% in taxes on income between $1 and $40,000. All income above $40,000 is taxed at 40%. The firm’s variable costs as a percent of revenues are 60%. Annual fixed costs are $250,000.

A. What level of sales must the firm achieve to earn income after taxes of $150,000?
B. Prepare a CVP graph for Dalton. Hint: Ignore income taxes.

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