b$-1.$ Assume the firm hires Ms$.$ Carr, an efficiency expert, as a

consultant. She suggests that by increasing selling and

administrative expenses to $15$ percent of sales, sales can be

increased to $$1,230,100.$ The extra sales effort will also reduce

cost of goods sold to $69$ percent of sales. $($There will be a larger

markup in prices as a result of more aggressive selling.$)$

Depreciation expense will remain at $$12,000.$ However, more

automobiles will have to be carried in inventory to satisfy

customers, and interest expense will go up to $$20,900.$ The firm$$s

tax rate will remain at $30$ percent. Compute revised earnings after

taxes based on Ms$.$ Carr$$s suggestions for Lemon Auto Wholesalers.

$($Round taxes and earnings after taxes to $1$ decimal place.$)$