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
Thx............. Alot for UR wisdom and help
& Happy Eid
to save your time you can get it by this formula
In case the target profit is percentage of sales you should treat it as {VC}
target volume in dallor = fc / p-vc- - Pre- tax Target on sales %
240,000 / 0.30 - 0.06/.60
240,000/ 0.20 = 1,200,000