Home / Questions / If Poole is in the 40% tax bracket how many units need to be sold in order to earn an
If Poole is in the 40% tax bracket, how many units need to be sold in order to earn an aftertax target profit of $249,000?
A. 30,067
B. 12,360
C. 27,667
D. 31,667
82. LeBlanc Manufacturing has the following product information available:

Sales price 
$60 per unit 

Variable costs 
$20 per unit 

Fixed costs 
$ 50,000 



If LeBlanc is in the 30% tax bracket, how many units need to be sold in order to earn an aftertax target profit of $490,000?
A. 17,500
B. 18,750
C. 19,286
D. 9,450
83. Blinson Manufacturing has the following product information available:

Sales price 
$75 per unit 

Variable costs 
$25 per unit 

Beforetax profit 
$180,000 



If Blinson has calculated that it needs to sell 20,000 units in order to earn an aftertax target profit of $126,000, what were Blinson’s fixed costs?
A. $ 54,000
B. $1,180,000
C. $ 820,000
D. $ 874,000
84. Howard Enterprises has a contribution margin ratio of 65% and fixed costs of $15,000. What would sales have to be in order for Howard to earn an aftertax profit of $50,000? The company is in the 40% tax bracket.
A. $ 23,077
B. $100,000
C. $151,282
D. $ 75,000
85. Which of the following is an assumption of CVP analysis?
A. Inventory levels increase at a constant rate.
B. Costs are linear throughout the relevant range.
C. The number of units sold is constant.
D. Fixed costs increase as production increases.
86. One of the major assumptions used in CVP analysis is:
A. that number of units sold each year remains the same.
B. that in a multiproduct environment, all products are assumed to be sold in identical proportion to total sales.
C. that the tax rate is not known.
D. that the sales price of a product will not change as volume changes.
87. Cost structure refers to the relative proportion of:
A. variable costs to contribution margin.
B. total costs to sales.
C. fixed costs to variable costs.
D. sales price per unit to variable costs per unit.
88. Operating leverage measures:
A. how sensitive profit is to a change in fixed costs.
B. how sensitive profit is to a change in sales volume.
C. how sensitive profit is to a change in sales price per unit.
D. how sensitive profit is to a change in tax rates.
89. Carson Cabana’s Inc. has the following information available regarding last year’s operations:

Sales 
$1,500,000 

Variable costs 
600,000 

Contribution margin 
900,000 

Fixed costs 
300,000 

Net income 
$ 600,000 



The company’s operating leverage was:
A. 1.5
B. .67
C. 2.5
D. .60
90. Hillary’s Restaurant has the following information available regarding last year’s operations:

Sales 
$900,000 

Variable costs 
300,000 

Contribution margin 
600,000 

Fixed costs 
175,000 

Net income 
$ 425,000 



The company’s operating leverage was:
A. .71
B. 1.50
C. 2.12
D. 1.41
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