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During its first year of operations, the Sara Corporation produced the following income statement results: Costs of goods sold are expected to vary with sales

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During its first year of operations, the Sara Corporation produced the following income statement results: Costs of goods sold are expected to vary with sales and be a constant percentage of sales. The general and administrative employees have been hired and are expected to remain a fixed cost. Marketing expenses are also expected to remain fixed since the current sales staff members are expected to remain on fixed salaries and no new hires are planned. The effective tax rate is expected to be 30 percent for a profitable firm. A. Estimate the survival or EBDAT breakeven amount in terms of survival revenues necessary for the Sara Corporation to breakeven next year. [5 points] B. Assume that the product selling price is $50 per unit. Calculate the EBDAT breakeven point in terms of the number of units that will have to be sold next year. [5 points]

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