Question

PA12.

Answer 1

Answer:

$\left[\begin{array}{cccc} unit sale&100000&90000&80000\\ sales revenue&3500000&3150000&2800000\\ COGS&&&\\ Material&900000&810000&720000\\ Labor&1000000&900000&800000\\ VMO&250000&225000&200000\\ FMO&80000&80000&80000\\ total&2230000&2015000&1800000\\ gross profit&1270000&1135000&1000000\\ V S and A&100000&90000&80000\\ F S and A&950000&950000&950000\\ operating income&220000&95000&-30000\\ tax expense&66000&28500&\\ net income&154000&66500&-30000\\\end{array}\right]$

Explanation:

We will cross-multiply the variables concept like sales revenues materials, labor and other

I.G

sales revenues for 90,000:

3,500,000 / 100,000 x 90,000 = 3,150,000

for 80,000:

3,500,000 / 100,000 x 80,000 = 2,800,000

The fixed will remain at the same value between the relevant range so we do not change them.

For the tax expense  we will have to check which is the rate

for 220,000 operating income the tax expense is 66,000

we can solve for rate: 66,000/220,000 = 0.3 = 30%

Now we will determinate the tax expense with that rate.

NOTE attached missing information