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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?
Suggested Answer: C
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The income statement for a volume of 48.000 units (4.000 per month x 12 months) would I appear' as follows:
26 comments · newest first
MA
Mable
7 days ago
I’m confused about the tax effect. It complicates things!
WE
Wei
12 days ago
I calculated it, and option C seems plausible too.
KA
Kayleigh
17 days ago
I disagree, I think it’s option D. The losses are significant.
AN
Antonio
23 days ago
I’m leaning towards option A. After-tax income seems reasonable.
GE
Gerri
28 days ago
I feel like the fixed costs really impact the outcome.
NO
Norah
1 month ago
This question is tricky! I think it requires careful calculations.
EL
Elvera
1 month ago
I believe option D, $(560,000), makes more sense.
JO
Josephine
1 month ago
But what if the fixed costs are too high?
AV
Avery
2 months ago
I’m leaning towards option A, $80,000.
ER
Eric
2 months ago
I feel like I need to break down the costs first.
TR
Trina
2 months ago
I think it's about calculating after-tax income.
LA
Launa
2 months ago
This question is tricky!
AL
Alease
2 months ago
4,000 units a month means 48,000 a year, right?
MA
Mary
2 months ago
Wait, how did you calculate that? Seems off to me.
JE
Jerlene
3 months ago
Definitely going with option D, that loss is huge!
CH
Chu
3 months ago
I think the after-tax income will be negative.
LA
Layla
3 months ago
Selling price is $60, fixed costs are $880,000.
CY
Cyndy
3 months ago
4,000 units a month means 48,000 a year, right?
RO
Rosalind
3 months ago
Wait, how did you calculate that? Seems off to me.
HY
Hyun
4 months ago
Definitely going with option D, that loss is huge!
MA
Marg
5 months ago
I think the after-tax income will be negative.
FA
Fannie
5 months ago
Selling price is $60, fixed costs are $880,000.
AN
Anastacia
6 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.
DE
Devora
6 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?
FR
Francesco
6 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.
RE
Reena
6 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.