# Bep liquidating

Why is the answer 0,000 instead of 0,000 (0,000 [break‐even sales] plus ,000)?

Remember that there are additional variable costs incurred every time an additional unit is sold, and these costs reduce the extra revenues when calculating income.

The ,000 of income required is called the targeted income.

The required sales level is 0,000 and the required number of units is 300,000.

Cost-volume-profit (CVP) analysis is used to determine how changes in costs and volume affect a company's operating income and net income.

In performing this analysis, there are several assumptions made, including: Key calculations when using CVP analysis are the contribution margin and the contribution margin ratio.

If a targeted net income (income after taxes) is being calculated, then income taxes would also be added to fixed costs along with targeted net income.When calculated as a ratio, it is the percent of sales dollars available to cover fixed costs.Once fixed costs are covered, the next dollar of sales results in the company having income.Assuming the company has a 40% income tax rate, its break‐even point in sales is

If a targeted net income (income after taxes) is being calculated, then income taxes would also be added to fixed costs along with targeted net income.

When calculated as a ratio, it is the percent of sales dollars available to cover fixed costs.

Once fixed costs are covered, the next dollar of sales results in the company having income.

Assuming the company has a 40% income tax rate, its break‐even point in sales is $1,000,000 and break‐even point in units is 333,333.

The amount of income taxes used in the calculation is $40,000 ([$60,000 net income ÷ (1 – .40 tax rate)] – $60,000).

||If a targeted net income (income after taxes) is being calculated, then income taxes would also be added to fixed costs along with targeted net income.When calculated as a ratio, it is the percent of sales dollars available to cover fixed costs.Once fixed costs are covered, the next dollar of sales results in the company having income.Assuming the company has a 40% income tax rate, its break‐even point in sales is $1,000,000 and break‐even point in units is 333,333.The amount of income taxes used in the calculation is $40,000 ([$60,000 net income ÷ (1 – .40 tax rate)] – $60,000).

,000,000 and break‐even point in units is 333,333.The amount of income taxes used in the calculation is ,000 ([,000 net income ÷ (1 – .40 tax rate)] – ,000).