2C1G ZIPPER COMPANY INVESTED $300,000 IN A NEW MACHINE TO PRODUCE CON...

207.

CSO: 2C1a

LOS: 2C1g

Zipper Company invested $300,000 in a new machine to produce cones for the textile

industry. Zipper’s variable costs are 30% of the selling price, and its fixed costs are

$600,000. Zipper has an effective income tax rate of 40%. The amount of sales required

to earn an 8% after-tax return on its investment would be

a.

$891,429.

b.

$914,286.

c.

$2,080,000.

d.

$2,133,333.