For the most recent year, Triad Company had fixed costs of $240,000 and variable costs of 75% of total sales revenue, earned $70,000 of net income after taxes, and had an income tax rate of 35%

Answer of Part 01:

Before Tax Income = After Tax Income / (1-tax rate)
Before Tax Income = $70,000 / (1 – 0.35)
Before Tax Income = $70,000 /0.65
Before Tax Income = $107,692.31

Answer of Part 3:

Before Tax Income = Sales – Variable Cost – Fixed Cots
$107,692.31 = Sales – Sales * 0.75 - $240,000
$347,692.31 = Sales * 0.25
Sales = $347,692.31 / 0.25
Sales = $1,390,769.24

Answer of Part 2:

Variable Cost = Sales * 75%
Variable Cost = $1,390,769.24 * 75%
Variable Cost = $1,043,076.93

Contribution Margin = Sales – Variable Cost
Contribution Margin = $1,390,769.24 - $1,043,076.93
Contribution Margin = $347,692.31

Answer of Part 4:

Break Even Point In Sales Dollars = Fixed Cost / Contribution Margin Ratio
Break Even Point in Sales Dollars = $240,000 / 0.25
Break Even Point in Sales Dollars = $960,000