Answer:
207,000
Explanation:
We can find the net profit after tax under the percent of sales method as follows. workings are explained as in order to estimate the net profit after tax we need to estimate the variable cost according to estimated sales.
Sales $4,500,000
Cost of Goods Sold ($3,825,000)
((3,570,000/4,200,000) x 4,500,000)
Gross Profit $675,000
Operating Expenses ($225,000
)
(( 210,000 / 4,200,000) x 4,500,000 )
Operating Profits $450,000
Interest Expense ($105,000
)
Net Profit before Taxes $345,000
Taxes ( 40 %) ($138,000
)
Net Profit after Taxes 207,000
