IMANET CMA Exam - Topic 12 Question 124 Discussion

Actual exam question for IMANET's CMA exam

Question #: 124
Topic #: 12

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?

A$80000

B$(800.000)

C$56000

D$(560.000)

Show Suggested 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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Marg

18 days ago

I think the after-tax income will be negative.

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Fannie

23 days ago

Selling price is $60, fixed costs are $880,000.

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Anastacia

1 month 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

1 month 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

2 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.

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Reena

2 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.

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