Increase the after-tax income


Problem:

The CEO of Madison. Inc. has provided you with the following information for its operation for 2013. Dollar figures are in thousands.

  • Sales Revenue : $200
  • Cost of Goods Sold : $120
  • Total Contribution Margin : $100
  • Fixed Costs : Manufacturing : $40
  • Fixed Costs : Selling and Adminstrative : $20
  • Variable Selling Expense : $20

The tax rate for Newark is 25%. If they want to increase the after-tax income for 2014 by $15, by how much do they have to increase their sales revenue? Assume everything else remains constant (including the price)

  • 20
  • 30
  • 40
  • 50
  • None

Note: Explain in detail.

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Accounting Basics: Increase the after-tax income
Reference No:- TGS0882512

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