Reference no: EM133118049

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