Answer:
Revenue= $503,538.46
Explanation:
Giving the following information:
In 2019, X Company's profit function was 0.31R - $89,000, where R is revenue. In 2020, the relationship between revenue and variable costs will not change, but fixed costs will increase by $16,020.
Tax rate= 35%
Desired profit= 33,200
X= 0.31R - (89,000+16,020)= 0.31R - 105,020
We need to incorporate the effect of the tax rate:
X= [(0.31R - 105,020)*(1-t)]
33,200= [(0.31*R) - 105,020]*(1-0.35)
33,200/0.65= 0.31R - 105,020
51,076.92 + 105,020= 0.31R
503,538.46= R
