During this accounting period, a company has variable costs of €27410, total fixed costs per period...

During this accounting period, a company has variable costs of €27410, total fixed costs per period of €20820, contribution margin ratio of 67 percent and an income tax rate of 27 percent.

If the desired after tax net income is €9320; then the sales revenue (in Euros) for this period is ________.

Expert Solution

Working Notes:
	CALCULATION OF CONTRIBUTION FOR NET INCOME OF 9320	AMOUNT
	Net income after Tax =	€ 9,320
	Income tax rate =	27%
	Net income after Tax = 100% - 27% =	73%
	Net income before tax = $ 9,320 X 100/ 73	€ 12,767
	Add: Fixed Cost	€ 20,820
	Contribution	€ 33,587

Solution:
	CALCULATION OF SALES REVENUE FOR GENERATING CONTRIBUTION OF 33,587

	Contribution =	€ 33,587

	Contribution Margin Ratio =	67%

	It means Contribution of 33,587 is 67% of Sales Revenue

	So, Sales Revenue = 33,587 X 100 / 67 =	€ 50,130

Answer = For Generating net income Euro 9,320 Sales revenue =	€ 50,130

ekkarill92 answered 2 years ago

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