Questiuons:
CVP, BEFORE- AND AFTER-TAX TARGETED INCOME
Head-Gear Company produces helmets for bicycle racing. Currently, Head-Gear charges a price of $30 per helmet. Variable costs are $20.40 per helmet, and fixed costs are $38,680. The tax rate is 25 percent. Last year, 13,400 helmets were sold.
Required:
1. What is Head-Gear's net income for last year?
2. What is Head-Gear's break-even revenue?
3. Suppose Head-Gear wants to earn before-tax operating income of $153,320. How many units must be sold?
4. Suppose Head-Gear wants to earn after-tax net income of $150,000. How many units must be sold?