Wang CoManufactures and Sells a Single Product That Sells for $450

question 126

Multiple Choice

Wang Co.manufactures and sells a single product that sells for $450 per unit; variable costs are $270 per unit.Annual fixed costs are $800,000.Current sales volume is $4,200,000.Management targets an annual pre-tax income of $1,125,000.
-Compute the dollar sales to earn the target pre-tax net income.

• A)$5,640,000.
• B)$4,812,500.
• C)$3,378,378.
• D)$2,991,004.
• E)$2,612,613.

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Definitions:

Stockholders' Equity

Represents the owners' residual interest in the assets of a corporation after deducting liabilities, often detailed in the equity section of the balance sheet.

Capital Surplus

Excess amount received by a company over the par value of its stock, reflected in the shareholders' equity section of the balance sheet.

Retained Earnings

The portion of a company's profit that is held or retained and not paid out as dividends to shareholders, often used for reinvestment in the business or to pay off debt.

Paid-In Capital

The total amount of money that shareholders have invested in the company by purchasing shares directly from the company.