9.60x - (6.62x + 1,056,000) * 0.4x = 264,960
I feel like my set up is wrong. I used excel and x should equal 576,645
Here is the question and breakdown:
What volume of sales in dollars must Doyle Candy Company achieve in the coming year to maintain the same net income after taxes as projected for the current year if the selling price of candy remains at 9.60 per box and the variable production costs increase 15%?
NI (after taxes) = 264,960
Selling price = 9.60
VC (after 15% increase) = 6.62
Tax = 40%
Fixed Costs = 1,056,000
Your revenue is 9.60x and total costs is (6.62x + 1,056,000). The difference between sales and revenue should be multiplied by 0.4 (the tax rate) to give me 264,960. I don't know what I'm doing wrong. As I said using excel, x = 576,645
I feel like my set up is wrong. I used excel and x should equal 576,645
Here is the question and breakdown:
What volume of sales in dollars must Doyle Candy Company achieve in the coming year to maintain the same net income after taxes as projected for the current year if the selling price of candy remains at 9.60 per box and the variable production costs increase 15%?
NI (after taxes) = 264,960
Selling price = 9.60
VC (after 15% increase) = 6.62
Tax = 40%
Fixed Costs = 1,056,000
Your revenue is 9.60x and total costs is (6.62x + 1,056,000). The difference between sales and revenue should be multiplied by 0.4 (the tax rate) to give me 264,960. I don't know what I'm doing wrong. As I said using excel, x = 576,645
