Question

A company sells 800 units at $16 each, has variable costs of $12 per unit, fixed costs of $1,200, and a 40% tax rate. The pre-tax income is $

Answer 1

Pretax income= 2,000

Step-by-step explanation:

Giving the following information:

A company sells 800 units at $16 each, has variable costs of $12 per unit, fixed costs of $1,200.

We need to determine the pretax income:

Sales= 800*16= 12,800

Variable cost= 800*12= (9,600)

Contribution margin= 3,200

Fixed cost= (1,200)

Pretax income= 2,000