d) With the current cost structure, including fixed costs of $266,000, what dollar sales volume is required to provide an after-tax net income of $250,000? Do not round until your final answer. Round your answer up to the nearest dollar. e) Prepare an abbreviated contribution income statement to verify that the solution to part (d) will provide the desired after-tax income. tound your answers to the nearest dollar. Use rounded answers for subsequent calculations. Do not use negative signs with any of your answers. WIGGINS PROCESSING COMPANY Income Statement For the Year 2008 $ Sales Variable costs Contribution margin Fixed costs Net income before taxes Income taxes (3796) Net income after taxes $ Check

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
Question
(d) With the current cost structure, including fixed costs of $266,000, what dollar sales volume is required to provide an after-tax net income of $250,000?
Do not round until your final answer. Round your answer up to the nearest dollar.
$
(e) Prepare an abbreviated contribution income statement to verify that the solution to part (d) will provide the desired after-tax income.
Round your answers to the nearest dollar. Use rounded answers for subsequent calculations. Do not use negative signs with any of your answers.
WIGGINS PROCESSING COMPANY
Income Statement
For the Year 2008
$
Sales
Variable costs
Contribution margin
Fixed costs
Net income before taxes
Income taxes (37%)
Net income after taxes $
Check
Transcribed Image Text:(d) With the current cost structure, including fixed costs of $266,000, what dollar sales volume is required to provide an after-tax net income of $250,000? Do not round until your final answer. Round your answer up to the nearest dollar. $ (e) Prepare an abbreviated contribution income statement to verify that the solution to part (d) will provide the desired after-tax income. Round your answers to the nearest dollar. Use rounded answers for subsequent calculations. Do not use negative signs with any of your answers. WIGGINS PROCESSING COMPANY Income Statement For the Year 2008 $ Sales Variable costs Contribution margin Fixed costs Net income before taxes Income taxes (37%) Net income after taxes $ Check
Multiple Product Planning with Taxes
In the year 2008, Wiggins Processing Company had the following contribution income statement:
WIGGINS PROCESSING COMPANY
Contribution Income Statement
For the Year 2008
Sales
Variable costs
Cost of goods sold
Selling and administrative
Contribution margin
Fixed Costs
Factory overhead
Selling and administrative
Before-tax profit
Income taxes (37%)
After-tax profit
$1,000,000
$420,000
200,000 (620,000)
380,000
186,000
80,000 (266,000)
114,000
(42,180)
$71,820
HINT: Round contribution margin ratio to two decimal places for your calculations below.
(a) Determine the annual break-even point in sales dollars.
$
(b) Determine the annual margin of safety in sales dollars.
$
(c) What is the break-even point in sales dollars if management makes a decision that increases fixed costs by $76,000?
Transcribed Image Text:Multiple Product Planning with Taxes In the year 2008, Wiggins Processing Company had the following contribution income statement: WIGGINS PROCESSING COMPANY Contribution Income Statement For the Year 2008 Sales Variable costs Cost of goods sold Selling and administrative Contribution margin Fixed Costs Factory overhead Selling and administrative Before-tax profit Income taxes (37%) After-tax profit $1,000,000 $420,000 200,000 (620,000) 380,000 186,000 80,000 (266,000) 114,000 (42,180) $71,820 HINT: Round contribution margin ratio to two decimal places for your calculations below. (a) Determine the annual break-even point in sales dollars. $ (b) Determine the annual margin of safety in sales dollars. $ (c) What is the break-even point in sales dollars if management makes a decision that increases fixed costs by $76,000?
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 2 steps

Blurred answer
Follow-up Questions
Read through expert solutions to related follow-up questions below.
Follow-up Question

Please explain E part , how all components has been calculated

Solution
Bartleby Expert
SEE SOLUTION
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education