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CVP, BEFORE- AND AFTER-TAX TARGETED INCOME

Head-Gear Company produces helmets for bicycle racing. Currently, Head-Gear charges a price of $30 per helmet. Variable costs are $20.40 per helmet, and fixed costs are $38,680. The tax rate is 25 percent. Last year, 13,400 helmets were sold.

Required:
1. What is Head-Gear's net income for last year?

2. What is Head-Gear's break-even revenue?

3. Suppose Head-Gear wants to earn before-tax operating income of $153,320. How many units must be sold?

4. Suppose Head-Gear wants to earn after-tax net income of $150,000. How many units must be sold?

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Financial Accounting, Accounting

Category:- Financial Accounting
Reference No.:- M91947671

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