(CVP, taxes) Joan Michaels has a small plant that makes playhouses. She sells them to local customers at $3,000 each. Her costs are as follows:
|
Costs |
Per Unit |
Total |
|
Direct material |
$1,200 |
|
|
Direct labor |
400 |
|
|
Variable overhead |
150 |
|
|
Variable selling |
50 |
|
|
Fixed production overhead |
$200,000 |
|
|
Fixed selling and administrative |
80,420 |
|
Joan is in a 35 percent tax bracket.
a. How many playhouses must she sell to earn $247,507 after taxes?
b. What level of revenue is needed to yield an after tax income equal to 20 percent of sales?