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Robin Company wants to earn a 6% return on sales after taxes. The company’s effective income tax rate is 40%, and its contribution margin is 30%.

 If Robin has fixed costs of$240,000, the amount of sales required to earn the desired return is

 

 

a. $375,000.

 

b. $400,000.

 

c. $1,000,000.

 

d. $1,200,000.

 

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Question added by mohamed Hakim CMA CPA Candidate , Accounting Manager , Andersen saudi arabia
Date Posted: 2015/05/24
mohamed Hakim CMA CPA Candidate
by mohamed Hakim CMA CPA Candidate , Accounting Manager , Andersen saudi arabia

answer is >>   D

_______________

thanks for all

 

Khalil Jeries Al Wahhab  CPA
by Khalil Jeries Al Wahhab CPA , Group Manager Internal Audit , El Seif for Operations and Maintenance

Option d:

240,000 /20% =1,200,000

20% is derived as the following::

 (30% -10%).

10% is derived as the following:

(6% /60%)

END.

 

Ahmed kandil
by Ahmed kandil , Cost Controller , Battour Holding Cpompany

D is the correct answer Thank you

Muhammad Ramzan Tufail  ACCA
by Muhammad Ramzan Tufail ACCA , Assistant Finance Manager , Eltizam Asset Management Group

(D) is the Correct Ans.

 

1,200,000

Disha Acharya
by Disha Acharya , Finance Manager , OWS CAPITAL & EVENTS MANAGEMENT LLC

Answer is D.1,200,000 

Let sales be x

Contribution - Fixed Cost = Profit

0.3x -240,000 =0.1x

Therefore Sales =1,200,000

Muhammad Azeem - CFMA
by Muhammad Azeem - CFMA , Finance Manager , Food Concepts LLC (Elevation Burger)

Answer is D:

Assume Sales is "K"

 

(0.3k -240,000) - (0.3k-240,000)x0.4 =0.06k

 

k =1,200,000

Hafiz muhammad Waqas
by Hafiz muhammad Waqas , Purchase Manager , Aldrees Petroleum

the answer is  C  1000,000 ,

 

Contribution - Fixed Cost =6% Sales 

 

30%Sales -240,000=6%Sales 

 

Sales(30-6)%=240,000

 

Sales =1000,000

 

 

let me know if its not the right answer . 

Zeeshan Ehtisham
by Zeeshan Ehtisham , Head of FP&A and Business Control , Tanmiah Food Group

D has to be the right answer....

حسين محمد ياسين
by حسين محمد ياسين , Finance Manager , مؤسسة عبد الماجد محمد العمر للمقاولات العامة

agree with answer D is true >>>>>>>>>>>>>>>>>>

Saji Soman
by Saji Soman , Chief Accountant , Al Redha Insurance Brokers LLC. (Dubai)

It is option D the exact sales figure  is1168000

ايمن محمد عاطف محمد
by ايمن محمد عاطف محمد , Director of the control and regulation unit , ACOLID

d. $1,200,000.---------------------------

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