During this accounting period,
During this accounting period, a company has variable costs of€27410, total fixed costs per period of €20820, contribution marginratio of 67 percent and an income tax rate of 27 percent.
If the desired after tax net income is €9320; then the salesrevenue (in Euros) for this period is ________.
Answer:
| Working Notes: | |||
| CALCULATION OF CONTRIBUTION FOR NETINCOME OF 9320 | AMOUNT | ||
| Net income after Tax = | € 9,320 | ||
| Income tax rate = | 27% | ||
| Net income after Tax = 100% – 27%= | 73% | ||
| Net income before tax = $ 9,320 X 100/73 | € 12,767 | ||
| Add: Fixed Cost | € 20,820 | ||
| Contribution | € 33,587 | ||
| Solution: | |||
| CALCULATION OF SALES REVENUE FORGENERATING CONTRIBUTION OF 33,587 | |||
| Contribution = | € 33,587 | ||
| Contribution Margin Ratio= | 67% | ||
| It means Contribution of 33,587 is 67%of Sales Revenue | |||
| So, Sales Revenue = 33,587 X 100 / 67= | € 50,130 | ||
| Answer = For Generating net incomeEuro 9,320 Sales revenue = | € 50,130 | ||
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