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flower627827
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Joined: 09 Jul 2009
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Posted: 30 Aug 2011 at 04:21 \| IP Logged

the formular: Revenue-variable cost- fixed cost=net income. Does
this "net income" include income taxes or not?

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tho9504
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Posted: 31 Aug 2011 at 18:05 \| IP Logged

My understanding is NO, the "net income" does not include the taxes per the above formula. Is this from the cost volume profit lesson?

If they gave you net income, you need to convert that to operating income (Net Income / (1-Tax))

(Fixed Cost + Operating Income) / CM = Break even

If i am wrong someone please correct me.

Maribel
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Posted: 01 Sep 2011 at 22:30 \| IP Logged

Net income from that equation does not include income taxes.

Fixed cost / contribution margin = BREAK EVEN QUANTITY TO BE SOLD (UNIT OR QUANTITY)

Fixed Cost / Contribution margin % = BREAK EVEN SALES IN DOLLAR

ramplacentia
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Posted: 17 Dec 2011 at 02:44 \| IP Logged

In my opinion, fixed ecostincludes income tax expense unless it is specifically excluded.

flower627827 wrote:

the formular: Revenue-variable cost- fixed cost=net income. Does
this "net income" include income taxes or not?

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