Problem $2-12($Algo$)$ Determination of profitability $[$LO$2-1]$

Lemon Auto Wholesalers had sales of $$1,650,000$ last year, and cost of goods sold represented $76$ percent of sales. Selling and administrative expenses were $13$ percent of sales. Depreciation expense was $$15,000$ and interest expense for the year was $$17,000.$ The firm's tax rate is $30$ percent.

a$.$ Compute earnings after taxes.

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 $$1,700,600.$ The extra sales effort will also reduce cost of goods sold to $72$ percent of sales. $($There will be a larger markup in prices as a result of more aggressive selling.$)$ Depreciation expense will remain at $$15,000.$ However, more automobiles will have to be carried in inventory to satisfy customers, and interest expense will go up to $$24,100.$ The firm's tax rate will remain at $30$ percent. Compute revised earning$$ after taxes based on Ms$.$ Carr's suggestions for Lemon Auto Wholesalers.

Note: Round taxes and earnings after taxes to $2$ decimal places. Input all your answers as positive values.