Management of Raley Company Would Like to Achieve a Target

question 71

Multiple Choice

Management of Raley Company would like to achieve a target profit after taxes of $80,000.The company's income tax rate is 20 percent.What target profit before taxes is required to earn $80,000 in after tax profit?

• A)$100,000
• B)$64,000
• C)$160,000
• D)$400,000
• E)None of the answer choices is correct.

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Definitions:

EOQ Analysis

Economic Order Quantity Analysis, a tool used in inventory management to determine the optimal order quantity that minimizes the total cost of inventory, including holding and ordering costs.

Carrying Costs

Expenses associated with maintaining inventory, including storage, insurance, and spoilage costs.

Ordering Costs

Expenses incurred in placing and receiving orders for goods, including transportation, handling, and clerical costs.