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Question - Ryan Corporation has the following information relating to its manufacturing and selling of cakes:
Average current selling price: $14.00
Average variable cost of cakes: $6.00
Fixed yearly costs: $240,000
The income tax rate is 35%
If Ryan Corporation had net income before tax of $90,000, what amount of income after tax would they have? How many cakes would generate this income level?
a) $58,500; 41,250 cakes
b) $31,500; 45,000 cakes
c) $45,000; 41,250 cakes
d) $60,000; 41,250 cakes
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