FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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4. Refer to part 3 and now assume that the tax rate is 30%. How many units would need to be sold each month for an after-tax target
profit of $99,000? (Round the final answer to the nearest whole number.)
Unit sales required
5. Refer to the original data. Compute the company's margin of safety in both dollar and percentage terms. (Round your percentage
answer to 2 decimal places.)
Margin of safety
units
Dollars Percentage
CM ratio
Monthly operating income increases by
%
6. What is the company's CM ratio? If sales increase by $55,000 per month and there is no change in fixed expenses, by how much
would you expect monthly net operating income to Increase? (Round your percentage answer to 2 decimal places and other answer
to the nearest whole dollar amount.)
%
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Transcribed Image Text:4. Refer to part 3 and now assume that the tax rate is 30%. How many units would need to be sold each month for an after-tax target profit of $99,000? (Round the final answer to the nearest whole number.) Unit sales required 5. Refer to the original data. Compute the company's margin of safety in both dollar and percentage terms. (Round your percentage answer to 2 decimal places.) Margin of safety units Dollars Percentage CM ratio Monthly operating income increases by % 6. What is the company's CM ratio? If sales increase by $55,000 per month and there is no change in fixed expenses, by how much would you expect monthly net operating income to Increase? (Round your percentage answer to 2 decimal places and other answer to the nearest whole dollar amount.) %
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