What volume of sales must be earned if kiltop wants to earn

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Reference no: EM13566587

Kiltop Company produces a toy dart gun. The projected income statement for the coming year follows:

Sales                                                                 $ 480,000
Less: Variable costs    ( 249,600)
Contribution margin            $ 230,400
Less: Fixed costs                                              ( 180,000)
Operating income                 $   50,400

a. Compute the contribution margin ratio for the toy gun.
b. How much revenue must Kiltop earn in order to breakeven?
c. What volume of sales must be earned if Kiltop wants to earn an after-tax income equal to 8% of sales? Assume that the tax rate is 34%.

Reference no: EM13566587

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