Question: 16-2 Variable selling expense is $14 per unit; fixed selling and administrative expense totals $290,000. Olivian has a tax rate of 40 percent. Required: 1.

16-2 Variable selling expense is $14 per unit; fixed selling and administrative

16-2

Variable selling expense is $14 per unit; fixed selling and administrative expense totals $290,000. Olivian has a tax rate of 40 percent. Required: 1. Calculate the before-tax profit needed to achieve an after-tax target of $300,000. ! X units Fonsback T Chock My Work 1. After-tax Profit/(1-Tax Rate) = Before-Tax Prolit. 2. The required number of units = (Fixed Costs + Target Profit )/ Contribution Margin per Unit. Fonchack 7 Chock My Work 3. See Cornerstone 16.4. Use a contribution margin format income statement. x units

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