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IMANET CMA Exam - Topic 12 Question 124 Discussion

Oradell Company sells is single product at a price of $60 per unit and incurs the following variable costs per unit of productOradell's annual fixed costs are $880,000, and Oradell is subject toe 30% income tax rate .A production and sales volume of 4.000 units of product per month would result in an annual after-tax income (loss) Oradell Comp of?
C) $56000
A) $80000
B) $(800.000)
D) $(560.000)

IMANET CMA Exam - Topic 12 Question 124 Discussion

Actual exam question for IMANET's CMA exam
Question #: 124
Topic #: 12
[All CMA Questions]

Oradell Company sells is single product at a price of $60 per unit and incurs the following variable costs per unit of product

Oradell's annual fixed costs are $880,000, and Oradell is subject toe 30% income tax rate .A production and sales volume of 4.000 units of product per month would result in an annual after-tax income (loss) Oradell Comp of?

Show Suggested Answer Hide Answer
Suggested Answer: C

The income statement for a volume of 48.000 units (4.000 per month x 12 months) would I appear' as follows:


by Kattie at Apr 10, 2026, 03:33 AM

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Layla
2 hours ago
Selling price is $60, fixed costs are $880,000.
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Cyndy
5 days ago
4,000 units a month means 48,000 a year, right?
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Rosalind
10 days ago
Wait, how did you calculate that? Seems off to me.
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Hyun
16 days ago
Definitely going with option D, that loss is huge!
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Marg
2 months ago
I think the after-tax income will be negative.
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Fannie
2 months ago
Selling price is $60, fixed costs are $880,000.
upvoted 0 times
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Anastacia
3 months ago
I believe the after-tax income is calculated after finding the pre-tax income, but I can't recall how to apply the tax rate correctly in this case.
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Devora
3 months ago
I’m a bit confused about how to handle the fixed costs in this scenario. Do we just deduct them from the income before calculating taxes?
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Francesco
3 months ago
I remember a similar question where we had to factor in fixed costs and taxes. I think we need to subtract the total variable costs from revenue before applying the tax rate.
upvoted 0 times
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Reena
3 months ago
I think we need to calculate the total revenue first, which is 4,000 units times $60, but I'm not sure if I remember the exact formula for after-tax income.
upvoted 0 times
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