Nkusi Incorporated, provides consulting services to city water authorities. The consulting firm’s contribution-margin ratio is 20 percent, and its annual fixed expenses are $198,000. The firm’s income-tax rate is 40 percent. Required: Calculate the firm’s break-even volume of service revenue. How much before-tax income must the firm earn to make an after-tax net income of $ 55,800? What level of revenue for consulting services must the firm generate to earn an after-tax net income of $ 55,800 Suppose the firm’s income-tax rate rises to 45 percent. What will happen to the break-even level of consulting service revenue?

Nkusi Incorporated, provides consulting services to city water authorities. The consulting firm’s contribution-margin ratio is 20 percent, and its annual fixed expenses are $198,000. The firm’s income-tax rate is 40 percent. Required: Calculate the firm’s break-even volume of service revenue. How much before-tax income must the firm earn to make an after-tax net income of $ 55,800? What level of revenue for consulting services must the firm generate to earn an after-tax net income of $ 55,800 Suppose the firm’s income-tax rate rises to 45 percent. What will happen to the break-even level of consulting service revenue?

SWFT Corp Partner Estates Trusts

42nd Edition

ISBN:9780357161548

Author:Raabe

Publisher:Raabe

Chapter16: Multistate Corporate Taxation

Section: Chapter Questions

Problem 46P

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Calculate the firm’s break-even volume of service revenue.
How much before-tax income must the firm earn to make an after-tax net income of $ 55,800?
What level of revenue for consulting services must the firm generate to earn an after-tax net income of $ 55,800
Suppose the firm’s income-tax rate rises to 45 percent. What will happen to the break-even level of consulting service revenue?

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