Question

Even my tutor is lost 12.4

You have developed the following income statement for your corporation. It represents the mosr recent year's operations. which ended yesterday.

Sales $45,750,000
Variable costs 22,800,000
Revenue before fixed costs $22,000,000
Fixed costs 9,200,000
EBIT $13,750,000
Interest expense 1,350,000
Earnings before taxes $12,400,000
Taxes at 50% 6,200,000
Net income $ 6,200,000

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 25 %, by what % would earnings before taxes ( and net income) increase?

Do not forget to show the necessary steps and explain how you attained that outcome.

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