Question
(Break-even analysis) You have developed the income statement in the popup window, ___ , for the...
(Break-even analysis) You have developed the income statement in the popup window, ___ , for the Hugo Boss Corporation. It represents the most recent year's operations, which ended yesterday. Your supervisor in the controller's office has just handed you a memorandum asking for written responses to the following questions:
a. What is the firm's break-even point in sales dollars?
b. If sales should increase by 40% percent, by what percent would earnings before taxes (and net income) increase?
Sales 51,090,139
Variable costs (27,913,000)
Revenue before fixed costs 23,177,139
Fixed costs (15,374,000)
EBIT 7,803,139
Interest expense (1,664,595)
Earnings before taxes 6,138,544
Taxes at 22% (1,350,480)
Net income ˜. 4,788,064
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