If net income is $10 and the tax rate is 50%, we know that income before taxes is $20. We also know that the cost of goods sold is 50% of the sales price since the gross margin is 50%. Total expenses are $70 (general and administrative and interest). The formula for the calculation of the revenue is as follows (where R represents revenue): R ? .5R ? 70 = 20. Solving for R we get $180, which is the revenue of this company.
This is the amount of the cost of goods sold. See the correct answer for a complete explanation.
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This not the correct answer. Please see the correct answer for a complete explanation. We have been unable to determine how to calculate this incorrect answer choice. If you have calculated it, please let us know how you did it so we can create a full explanation of why this answer choice is incorrect. Please send us an email at support@hockinternational.com. Include the full Question ID number and the actual incorrect answer choice -- not its letter, because that can change with every study session created. The Question ID number appears in the upper right corner of the ExamSuccess screen. Thank you in advance for helping us to make your HOCK study materials better.
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