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Stephanie's Bridal Shoppe Sells Wedding Dresses

question 135

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Stephanie's Bridal Shoppe sells wedding dresses. The average selling price of each dress is $1,200, variable costs are $700, and fixed costs are $100,000. How many dresses must the Bridal Shoppe sell to yield after-tax net income of $20,000, assuming the tax rate is 40%?


Definitions:

Dividends

Disbursements by a company to its stockholders, often as a profit-sharing mechanism.

Obligations

Legal or financial duties that one party is bound to perform for another, such as the repayment of a loan.

Investing Section

A part of the cash flow statement that shows cash flows from the acquisition and disposal of long-term investments and fixed assets.

Operating Section

In the context of financial reporting, this term specifies the portion of the cash flow statement that deals with cash flows from operational activities.

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