Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

mama's pies is considering adding a new line of pies to its product offerings. it is expeceted that each pie will sell for $12 and

mama's pies is considering adding a new line of pies to its product offerings. it is expeceted that each pie will sell for $12 and the variable costs per pie will be $7.75. total fixed costs are expected to be $105,000. mama's pies has a marginal tax rate of 40% and will have interest expense of $7,500. mama's expects to sell about 35,000 pies in the first year. prepare a contribution format projected income statement for mama's pies. a) whats the new products first year net income? b) calculate the breakeven points in both units and dollars c) if the price of new pies for the first year operations were to change what would be the breakeven price d) what would the projected sales units be if mama wants a targeted EBIT of $25,000 e) whats the defree of operating leverage and combined leverage for EBIT at $25,000 & $15,000

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

More Books

Students also viewed these Finance questions