Читать книгу Cost Accounting For Dummies - Kenneth W. Boyd - Страница 89

Assume the business needs a car. The cost is $5,000. You have to earn more than $5,000, pay tax on that amount (say 30 percent), and then pay for the car. How much do you have to earn? Here’s a formula to compute how much you need to earn, which I refer to as pre-tax dollars:

 Pre-tax dollars needed for purchase = cost of item ÷ (1 - tax rate)

 Pre-tax dollars needed for purchase = $5,000 ÷ (1 - 0.30)

 Pre-tax dollars needed for purchase = $5,000 ÷ 0.70

 Pre-tax dollars needed for purchase = $7,142.86

The cost of the car in pre-tax dollars is $7,142.86.

When you allow for taxes, it takes $1.43 to buy $1.00 worth of car. $7,142.86 ÷ $5,000 equals 143% (with rounding). To purchase the car, you need 143% of $5,000, or $7,142.86. The taxes paid in this example are $2,142.86, the difference between $7,142.68 and $5,000.