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# Computing Break-even Point and After-tax Target Profit

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Jo Manufacturing Company provides the following data from 2011: 20,000 units were sold for \$60 each; total variable expenses were 900,000 and total fixed expenses were \$240,000. Jo's income tax rate is 30%.

What was Jo's break-even point in units?
How many units would have to be sold to earn an after tax profit of \$90,000?
What net income would you expect in 2012 if sales increase 20%?

#### Solution Preview

Jo Manufacturing Company provides the following data from 2011: 20,000 units were sold for \$60 each; total variable expenses were 900,000 and total fixed expenses were \$240,000. Jo's income tax rate is 30%.
What was Jo's break-even point in units?
Break-even point in units = Fixed ...

#### Solution Summary

This solution illustrates how to compute the break-even point and after-tax target profit of a project.

\$2.19