Calculate that revenue required to earn an after-tax profit, Accounting Basics

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Calculate that revenue required to earn an after-tax profit

Tom and Linda own Hercules Gym. An individual membership costs $100 per month. Tom and Linda estimate variable costs at $35 per member per month and fixed costs at $40,950 per month. They currently have 950 members.

a. How many members does Hercules need to break even?

b. Suppose Hercules pays income taxes that amount to 35% of income. How many members does Hercules need to report after tax profits of $11,375?

c. Using the contribution margin ratio, calculate that revenue required to earn an after-tax profit of $11,375.

d. What is Hercules' margin of safety?

e. What is Hercules' operating leverage?

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Accounting Basics: Calculate that revenue required to earn an after-tax profit

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Accounting Basics: Calculate that revenue required to earn an after-tax profit

Reference No:- TGS079295

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Recent Questions Asked Accounting Basics

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Request for Solution File

Ask an Expert for Answer!!

Accounting Basics: Calculate that revenue required to earn an after-tax profit

Reference No:- TGS079295

Recent Questions Asked Accounting Basics

Q : What portion of the loan should be eliminated

Q : Income statement and subsidiary

Q : Equivalent units of the weighted average method

Q : How monthly profit increase as revenue increases

Q : Calculate that revenue required to earn an after-tax profit

Q : Write down the expression for annual after-tax profit

Q : At what amount should the new truck be recorded

Q : What amount should be reported as goodwill

Q : Total periodic pension cost reported in income statement

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