Assume the Following Cost Information for Zachary Company Must Be Sold to Earn an After- Tax Net Income

question 31

Multiple Choice

Assume the following cost information for Zachary Company: $\begin{array}{ll}\text { Selling price per unit } & \$ 144 \\\text { Variable costs per unit } & \$ 80 \\\text { Total fixed costs } & \$ 80,000 \\\text { Tax rate } & 40 \%\end{array}$ must be sold to earn an after- tax net income of $40,800.

• A) 3,700 units
• B) 1,594 units
• C) 1,063 units
• D) 2,313 units

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Definitions:

Pre-Reconciliation Cash Balance

The cash balance reported in accounting records before adjustments are made for reconciling items in a bank reconciliation.

Outstanding Checks

Checks that have been written and recorded in a company's financial ledger but have not yet been cashed or cleared by the bank.

Deposits in Transit

Funds that have been deposited by a company but not yet recorded by the bank, often causing a discrepancy in the bank statement versus the company’s record.

Contra-Revenue Account

An account that is deducted from a company's gross revenue, which results in net revenue, examples include sales returns, allowances, and discounts.