Question
(Break-even analysis) You have developed the income statement Sales $51,166,835 Variable costs (27,255,000) Revenue before fixed costs $23,911,835 Fixed costs (14,849,000) EBIT $9,062,835 Interest expense
(Break-even analysis) You have developed the income statement
Sales | $51,166,835 |
Variable costs | (27,255,000) |
Revenue before fixed costs | $23,911,835 |
Fixed costs | (14,849,000) |
EBIT | $9,062,835 |
Interest expense | (1,977,878) |
Earnings before taxes | $7,084,957 |
Taxes at 21% | (1,487,841) |
Net income | $5,597,116 |
for the Hugo Boss Corporation. It represents the most recent year's operations, which ended yesterday. Your supervisor in the controller's office has just handed you a memorandum asking for written responses to the following questions: a. What is the firm's break-even point in sales dollars? b. If sales should increase by percent, by what percent would earnings before taxes (and net income) increase?
a. What is the firm's break-even point in sales dollars? (Round to the nearest dollar.)
b. If sales should increase by 30 percent, by what percent would earnings before taxes increase? (Round to two decimal places.)
Step 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