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6:DOL, DFL, and DTL BWP projects sales of 100,000 units next year at an average price of $50 per unit. Variable costs are estimated at
6:DOL, DFL, and DTL BWP projects sales of 100,000 units next year at an average price of $50 per unit. Variable costs are estimated at 40% of revenue, and fixed costs will be $2.4 million. BWP has $1 million in bonds outstanding on which it pays 8%, and its marginal tax rate is 40%. There are 100,000 shares of stock outstanding which trade at their book value of $30. a. Compute BWP's contribution margin per unit, contribution margin ratio, EAT, and EPS. b. Calculate BWP's breakeven point in units and dollars c. Calculate BWP's DOL, DFL and DTL. 6:DOL, DFL, and DTL BWP projects sales of 100,000 units next year at an average price of $50 per unit. Variable costs are estimated at 40% of revenue, and fixed costs will be $2.4 million. BWP has $1 million in bonds outstanding on which it pays 8%, and its marginal tax rate is 40%. There are 100,000 shares of stock outstanding which trade at their book value of $30. a. Compute BWP's contribution margin per unit, contribution margin ratio, EAT, and EPS. b. Calculate BWP's breakeven point in units and dollars c. Calculate BWP's DOL, DFL and DTL
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