please help: Blanchard Company manufactures a single product that sells for $120

Question

please help: Blanchard Company manufactures a single product that sells for $120 per unit and whose total variable costs are $84 per unit. The company targets an annual after-tax income of $585,000. The company is subject to a 35% income tax rate. Assume that fixed costs remain at $529,200.

Blanchard Company manufactures a single product that sells for $120 per unit and whose total variable costs are $84 per unit. The company targets an annual after-tax income of $585,000. The company is subject to a 35% income tax rate. Assume that fixed costs remain at $529,200. Pretax income (1) Compute the unit sales to earn the target after-tax net income. Choose Numerator Choose Denominator: Units to achieve target Units to achieve target = Fixed costs plus after tax income (2) Compute the dollar sales to earn the target after-tax net income. Choose Numerator: Choose Denominator: - Dollars to achieve target = Dollars to achieve target

Explanation / Answer

Statement showing computations Particulars Amount After Tax Income          585,000.00 Tax Rate 35% Pre Tax Income = 585,000/(1-.35) =            900,000.00 Selling price per unit                  120.00 Variable costs per unit                     84.00 Contribution per unit                     36.00 Unit sales = FC+After tax income/cont Unit sales = 529,200 + 900,000/36 Unit sales = 1,429,200/36            39,700.00 $ sales = (FC+After tax income)*SP/cont $ sales = (529,200 + 900,000)120/36 $ sales = (1,429,200)120/36      4,764,000.00

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