Output Level120000unitsOperating Assets6000000Step 1: Compute the operating prof

Output Level120000unitsOperating Assets6000000Step 1: Compute the operating profit margin:Operating Asset Turnover12timesReturn on Operating Assets48%Step 2: Compute the sales level associated with the given output level:Degree of Operating Leverage10timesInterest Expense720000Step 3: Compute EBIT:Tax Rate42%Step 4: Compute revenue before fixed costs:Step 5: Compute total variable costs:Step 6: Compute total fixed costs:Step 7: Find selling price per unit Step 8: Find the variable cost per unit Step 9: Compute break-even point (in units):Step 10: Prepare the Income StatementSalesVariable CostsRevenue before fixed costsFixed CostsEBITInterest ExpenseEarnings before TaxesTaxes @ 42%Net IncomeA.Break-even point in sales dollars =
1200006000000120.48107200000.42WEEK 4
Given Data:
Output Level
units
Operating Assets
Step 1: Compute the operating profit margin:
Operating Asset Turnover
times
Return on Operating Assets
Step 2: Compute the sales level associated with the given output level:
Degree of Operating Leverage
Interest Expense
Step 3: Compute EBIT:
Tax Rate
Step 4: Compute revenue before fixed costs:
Step 5: Compute total variable costs:
Step 6: Compute total fixed costs:
Step 7: Find selling price per unit
Step 8: Find the variable cost per unit
Step 9: Compute break-even point (in units):
Step 10: Prepare the Income Statement
Sales
Variable Costs
Revenue before fixed costs
Fixed Costs
EBIT
Earnings before Taxes
Taxes @ 42%
Net Income
A.
Break-even point in sales dollars =
PRACTICE

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