managerial accounting

Incturing: its sales people are sainted, The following Inancial Bionmakem is wymtbe In Un Fair OLSON COMP. MIAMI MIC. Year 1 Your 2 Your Salon. . . . . . . Expenses Including Inses. 4 000,000 5 600,500 (626,060) (123,200) Net Income . . . . $ 72.000 $ 156.600 1 72,060 After examining cost data, you find that the fixed cost for Olson Corp. is 360,47 The lived cant fin Miami Inc. Is $300,000. The tax rate for both companies is 40 percent. b. Recast the income statements into a variable costing formal. What are the break even sales for each firm for each year? (Round to the next highest winds dollar.) Assume that you could acquire either firm for $1,200,000, and you want an after-tax return of 12 percent on your investment, Determine what sales level for each firm would allow you to reach your goal. d. What is the margin of safety for each firm for each year? What is the degree of operating leverage? Assume that product demand for Year 3 is expected to rise by 15 percent from the Year 2 level. What will be the expected net income for each firm? Assume that product demand for Year 3 is expected to fall by 20 percent from the Year 2 level, What will be the expected net income for each firm? Prepare a profit-volume graph for each firm