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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

If Poole is in the 40% tax bracket, how many units need to be sold in order to earn an after-tax 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 after-tax 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

 

Before-tax profit

$180,000

 

 

 


If Blinson has calculated that it needs to sell 20,000 units in order to earn an after-tax 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 after-tax 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 multi-product 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

 

Jan 09 2020 View more View Less

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