Answer:
$10,680
Explanation:
Computation of the amount of how much more tax that Logan will pay currently if MG is a C corporation compared to the tax he would pay if it were an S corporation
Logan would pay the amount of $19,320 in taxes if Military Gear Inc. is a C corporation ($80,500 ×24%).
In a situation were it is an S corporation, that means he would pay the amount of $8,640 in taxes (($80,500 - $44,500) × 24%).
Therefore he has to pay the amount of $10,680 more in his taxes which is ($19,320 - $8,640) currently if Military Gear, Inc.
Logan's tax basis $155,500 -$111,000 tax loss for the year =$44,500
Therefore the amount of money that Logan will tend to pay MG is a C corporation compared to the tax he would pay if it were an S corporation would be $10,680.
Answer:
Mojave Corporation and Target Costing:
If Mojave changes to the approach known as target costing, the company will first: trim its $350 cost.
Explanation:
Target Costing is a costing technique where a desired profit margin is set and deducted from a competitive market price. The selling price equals the target cost plus the profit margin. This implies that there is a target cost above which a manufacturer will not exceed given its desired profit and a competitive market price. Therefore, cost must be trimmed to achieve the desired profit level given a market price.
Mojave needs to plan ahead for the price points, product costs, and profit margins it wants to achieve. If it cannot achieve these, then it will be in its best interest not to continue production.