The Troy Company has the following information available:
$\begin{array}{ll}
\text { Total fixed costs }&\$400,000\
\text { Expected sales (units) } & 100,000 \
\text { Contribution margin per unit } & \$ 7.50 \
\text { Taxrate } & 30 \%
\end{array}$
What is the after-tax net income?
A) $245,000
B) $280,000
C) $350,000
D) $400,000

Question

Quizplus · Accepted Answer

The after-tax net income is calculated as follows: First, calculate the total contribution margin by multiplying the expected sales units by the contribution margin per unit (100,000 units * $7.50 = $750,000). Then, subtract the total fixed costs ($750,000 - $400,000 = $350,000) to get the pre-tax income. Finally, calculate the after-tax net income by subtracting the taxes (30% of $350,000 = $105,000) from the pre-tax income ($350,000 - $105,000 = $245,000).

The Troy Company Has the Following Information Available What Is the After-Tax Net Income? A) $245,000 B) $280,000

The Troy Company Has the Following Information Available What Is the After-Tax Net Income?
A) $245,000
B) $280,000