Survival Revenues Breakeven (must upload your answers in the excel spreadsheet linked in this assignment called "Survival BREAKEVEN Excel file"

During its first year of operations, the SubRay Corporation produced the following income statement results:

Net Sales $300,000

Cost of Goods Sold -180,000

Gross Profit 120,000

General & Administrative -60,000

Marketing expenses -60,000

Depreciation -20,000

EBIT -20,000

Interest expenses -10,000

Earnings before taxes -30,000

Income taxes -0

Net earnings (loss) $-30,000

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.

Use this spreadsheet "Survival BREAKEVEN Excel file" to complete your calculations and upload to the assignment Chapter 4 Survival Breakeven Exercise Section 4-6 pgs 148-151.xlsx Download Chapter 4 Survival Breakeven Exercise Section 4-6 pgs 148-151.xlsx

1. Estimate the survival or EBDAT breakeven amount in terms of survival revenues necessary for the SubRay Corporation to breakeven next year. (20 pts)
2. 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. (20 pts)
3. What is Survival breakeven and why is it important to know about your business? (10 pts)