Answer the following questions using the information below:
Assume the following cost information for Fernandez Company:

-To determine the effect of income tax on a decision, managers should evaluate:
A)target operating income
B)contribution margin
C)target net income
D)selling price

Question

Answer the following questions using the information below:
Assume the following cost information for Fernandez Company:
 
-To determine the effect of income tax on a decision, managers should evaluate:
A)target operating income 
B)contribution margin 
C)target net income 
D)selling price

Quizplus · Accepted Answer

To evaluate the effect of income tax on a decision, managers should evaluate target net income as it takes into account the income tax expense in addition to the desired profit. Target operating income and contribution margin do not account for income tax, and selling price is not directly relevant to evaluating the effect of income tax on a decision.

Answer the Following Questions Using the Information Below