A small ceramics company is compiling data about its performance during the last two fiscal years. They reported the following: Using the information above, what is their after-tax income for year 1?
A) $104,244.19
B) $241,744.19
C) $312,732.75
D) $416,977.00

Question

A small ceramics company is compiling data about its performance during the last two fiscal years. They reported the following:  Using the information above, what is their after-tax income for year 1?
A) $104,244.19 
B) $241,744.19 
C) $312,732.75 
D) $416,977.00

Quizplus · Accepted Answer

This question requires familiarity with financial measures companies use to evaluate their performance. The formula for After-Tax Income is: Pre-Tax Income × (1 - Tax Rate), and Pre-Tax Income = Sales - Variable Costs - Fixed Costs = $1,890,000 - $923,023 - $550,000 = $416,977. Therefore, the After-Tax Income = $416,977 × (1 - 0.25) = $312,732.75 (Choice C).

A Small Ceramics Company Is Compiling Data About Its Performance