Question: Apollo Company management (in Exercise) targets an annual after-tax income of $840,000. The company is subject to a 20% income tax rate. Assume that fixed costs remain at $630,000. Compute the
(1) unit sales to earn the target after-tax net income and
(2) dollar sales to earn the target after-tax net income.
Exercise: Apollo Company manufactures a single product that sells for $168 per unit and whose total variable costs are $126 per unit. The company's annual fixed costs are $630,000.
(1) Use this information to compute the company's
(a) contribution margin,
(b) contribution margin ratio,
(c) break-even point in units, and
(d) break-even point in dollars of sales.