Question

For the Questions that Follow, please consider the Rollflex’s financial data as follows. All figures are...

For the Questions that Follow, please consider the Rollflex’s financial data as follows. All figures are in dollars.

Revenue 12,500,000

Cost of Goods Sold 8,750,000

Sales Expense 1,400,000

Administration Expense 2,100,000

Depreciation 490,000                 

Interest Expense 280,000

Net Income (364,000)
        (tax rate is 30%)

What is Rollflex's contribution margin

What is Rollflex's EBIT?

What is Rollflex's NOPAT?

What is Rollflex's operating breakeven revenue?

What is Rollflex's EBITDA?

What is Rollflex's Cash Fixed Cost (CFC)?

What is Rollflex's Survival Revenue?

What is Rollflex's Net Income Breakeven Revenue?

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Homework Answers

Answer #1

As per rules I am answering the first 4 subparts of the question1:

1: Contribution margin = Contribution/ Sales

= (Sales – cost of goods sold)/ Sales

= (12500000-8750000)/ 12500000

=30%

2: EBIT= Revenue- Cost of goods sold - Sales Expense- Administration Expense- Depreciation

= 12500000-8750000-1400000-2100000-490000

=-240000

3: NOPAT = EBIT*(1-Tax)

= -240000*(1-0.3)

= -168000

4: operating breakeven revenue= Fixed operating costs/ Contribution margin

= (Sales Expense+Administration Expense+ Depreciation)/30%

=(1400000+2100000+490000)/30%

=13,300,000

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