Alclear Pool & Spa presently provides a weekly maintenance service to 150 homes. Fixed costs are approximately $13 000 per quarter (13 weeks). Customers pay $270 per quarter for the weekly service. All contracts are written for one quarter (13 weeks). Now assume the contracts with customers are restructured such that the price per quarter is $300 and the contribution margin percentage is 57 per cent. Assume the tax rate is 25 per cent.

Determine the sales dollars (to the nearest $100) necessary to obtain an after-tax profit of $9 600 per quarter.

Answer rating: 100% (QA)

Fixed costs per quarter 13000 Contribution margin percentage 57 Tax rate 25 Requir... View the full answer