Question
(Break-even analysis) You have developed the income statement in the popup window, LOADING..., for the Hugo...
(Break-even analysis) You have developed the income statement in the popup window, LOADING..., 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:
|
Sales |
$50,124,176 |
|
|
Variable costs |
(25,546,000) |
|
|
Revenue before fixed costs |
24,578,176 |
|
|
Fixed costs |
(13,006,000) |
|
|
EBIT |
$11,572,176 |
|
|
Interest expense |
(1,148,942) |
|
|
Earnings before taxes |
$10,423,234 |
|
|
Taxes at 35% |
(3,648,132) |
|
|
Net income |
$6,775,102 |
a. What is the firm's break-even point in sales dollars?
b. If sales should increase by 30 percent, by what percent would earnings before taxes (and net income) increase?
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Answer #1
I HAVE SHOWN ANSWERS BY 2 DIFFERENT METHODS AS I DONT
KNOW WHICH METHOD YOU HAVE LEARNED. BOTH ARE PERFECT AND
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