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Flounder Company, which is subject to a 40% income tax rate, projected its income before taxes...

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Accounting

Flounder Company, which is subject to a 40% income tax rate,projected its income before taxes for next year as shownhere:

Sales (272,000 units)$13,600,000
Cost of sales
Variable costs3,400,000
Fixed costs

5,100,000

Pretax earning

$5,100,000

1) If Flounder wants $7,650,000 in pretax earning, what is therequired level of sales, in dollars?

2) If Flounder’s net assets are $61,200,000, what amount ofrevenue must be achieved for Flounder to earn a 10% after-taxreturn on assets?

3) If Flounder wants after-tax earnings of 30% of sales, what isthe required level of sales in dollars and in units?

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