Assume the Following Cost Behaviour Data for Portrait Company -What Volume of Sales Dollars Is Required to Earn an

question 15

Multiple Choice

Assume the following cost behaviour data for Portrait Company: $\begin{array}{lll}\text { Sales price } & \$ 18.00 & \text { per unit } \\\text { Variable costs } & \$ 13.50 & \text { per unit } \\\text { Fixed costs } & \$ 22,500 & \\\text { Tax rate } & 40 \% &\end{array}$
-What volume of sales dollars is required to earn an after-tax income of $40,500?

• A)$90,000
• B)$252,000
• C)$360,000
• D)$495,000

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Definitions:

Normal Balance

Refers to the debit or credit balance that is expected on a specific type of account based on its accounting rule.

Contra Asset

An asset account where the account balance is a negative amount that reduces the total value of assets on the balance sheet.

Accrued Expenses

Expenses that have been incurred but not yet paid or recorded, representing liabilities for a business.

Liabilities

Liabilities represent financial obligations or debts that a company owes to external parties, such as loans and accounts payable.