Maxie Pty Ltd Makes and Sells Two Types of Shoes,Plain

question 91

Multiple Choice

Maxie Pty Ltd makes and sells two types of shoes,Plain and Fancy.Product data is as follows:
Sixty per cent of the sales in units are Plain and annual fixed expenses are $45 000 and the sales mix remains constant.Assume an income tax rate of 20 per cent.How many units of Plain must Maxie Pty Ltd sell to earn an after tax profit of $18 000?

• A) 4500
• B) 7875
• C) 3960
• D) 8437

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Definitions:

Quarterly

Occurring every three months or four times a year.

Annuity

An investment vehicle that provides a consistent series of disbursements to a person, often employed in retirement planning.

RRSP

A registered retirement savings plan, a tax-advantaged account designed to help Canadians save for retirement.

Compounded

The process by which interest is earned on both the initial principal and the interest that has been added to it, thus "compounding" the amount.