If selling price per unit is $30,variable costs per unit are $20,total fixed costs are $10 000,the tax rate is 30%,and the company sells 6000 units,net profit after tax is:
A)$12 000.
B)$40 000.
C)$35 000.
D)$14 000.

Question

Quizplus · Accepted Answer

First, let's calculate the contribution margin:
Contribution Margin = Selling Price per unit - Variable Costs per unit
Contribution Margin = $30 - $20
Contribution Margin = $10

Next, let's calculate the total contribution margin:
Total Contribution Margin = Contribution Margin per unit x Number of units sold
Total Contribution Margin = $10 x 6000
Total Contribution Margin = $60 000

Now, we can calculate the net profit before tax:
Net Profit Before Tax = Total Contribution Margin - Total Fixed Costs
Net Profit Before Tax = $60 000 - $10 000
Net Profit Before Tax = $50 000

To calculate the net profit after tax, we need to apply the tax rate of 30%:
Net Profit After Tax = Net Profit Before Tax x (1 - Tax Rate)
Net Profit After Tax = $50 000 x (1 - 0.30)
Net Profit After Tax = $35 000

Therefore, the best choice is C) $35 000.

If Selling Price Per Unit Is $30,variable Costs Per Unit