In 2010, Triad Company had fixed costs of $200,000 and variable costs of 80 percent of total

Question:

In 2010, Triad Company had fixed costs of $200,000 and variable costs of 80 percent of total sales revenue, earned $70,000 of net income after taxes, and had an income tax rate of 30 percent.

Fixed Costs		$ 200,000
Net Income		$ 70,000
Variable cost ratio		80%
Tax rate		30%

Required

Determine (1) before-tax income, (2) total contribution margin, (3) total sales, and (4) break-even point in dollar sales.

Contribution Margin
Contribution margin is an important element of cost volume profit analysis that managers carry out to assess the maximum number of units that are required to be at the breakeven point. Contribution margin is the profit before fixed cost and taxes...