Question
Smith Bottling Company (SBC) expects this year's sales to be $270,000. SBC's variable operating costs are 60 percent of sales and its fixed operating costs
Smith Bottling Company (SBC) expects this year's sales to be $270,000. SBC's variable operating costs are 60 percent of sales and its fixed operating costs are $68,000. SBC pays interest on its debt equal to $15,000 per year and its marginal tax rate is 35 percent. SBC has no preferred stock.
Compute SBC's DOL, DFL, and DTL. Do not round intermediate calculations. Round your answers to two decimal places.
DOL:
DFL:
DTL:
If sales turn out to be $286,200 rather than $270,000, what will be SBC's EBIT and net income? Do not round intermediate calculations. Round your answers to the nearest dollar.
EBIT: $________
Net income: $________
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