Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Average estimated selling price per electric bike is 525 CVP Budgeted Income Statement for year ended 31st December 2022 $ $ Sales $ 6,247,500 Less:
Average estimated selling price per electric bike is 525
CVP Budgeted Income Statement for year ended 31st December 2022 $ $ Sales $ 6,247,500 Less: Variable costs $ 2,523,622 Cost of Sales $ 2,441,026 Selling & Administration variable costs $ 82,596 Total Contribution Margin $ 3,723,878 Less: Fixed costs $ 1,243,200 Selling & Administration fixed costs $ 1,243,200 Net operating income $ 2,480,678 Interest costs $ 3,900 Income Tax $ 743,033 Net Income after tax $ 1,733,745 1. What is the breakeven point in units sold? What is the breakeven point in sales dollars? 2. How many units need to be sold to earn an aftertax profit of $ 500,000 . Assume a tax rate ofl .A 30% 3. What is the margin of safety in $? 4. If sales were to increase by 15% in 2023 from 2022 projected levels and expense behaviour remains the same for 2023 as in 2022, how much will net income before tax and interest increase by as a percentage. Use operating leverage to answer this. 5. If CBH spend $ 50,000 on an advertising campaign, it believes sales (units) will increas 5.00%! without any change in average selling price. Should it take on the advertising? Why or why notStep by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started