Cost Accounting (15th Edition)

Published by Prentice Hall
ISBN 10: 0133428702
ISBN 13: 978-0-13342-870-4

Chapter 3 - Cost-Volume-Profit Analysis - Assignment Material - Questions - Page 93: 3-8

Answer

An increase in the income tax rate will result in a higher breakeven point, requiring more units to be sold to cover both fixed costs and taxes. This reduces profitability and may necessitate adjustments in pricing or cost control strategies to maintain competitiveness.

Work Step by Step

An increase in the income tax rate will result in a higher breakeven point, requiring more units to be sold to cover both fixed costs and taxes. This reduces profitability and may necessitate adjustments in pricing or cost control strategies to maintain competitiveness.
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