Answer:
$2,553,191
Explanation:
The formula to compute the break even point in dollars amount is presented below:
= (Fixed cost ) ÷ (Profit volume ratio)
where,
Fixed cost = $300,000
And the profit volume ratio would be
= (Contribution margin) ÷ (Sales) × 100
We assume the sales be 100%
So, the variable cost is
= 88.25%
And, the contribution margin is
= 100 - 88.25
= 11.75%
So, the break even sales would be
= $300,000 ÷ 11.75%
= $2,553,191
In a 100 percent capitalist structure, there are basically
two advantages that the owners are offered:
1. They can make as much profit as they desire, as long as they are
hardworking and the market permits it.
2. They don’t have to bother themselves about the welfare of their workers.
Answer:
The projected Net Income is $70,784
Explanation:
The Pro- forma income Statement
Working Note:
Variable cost = Sales × 44%
= $585,000 × 44%
= $257,400
EBT (Earnings before Tax) = Sales - Variable cost - fixed cost - depreciation
= $585,000 - $257,400 - $187,000 - $51,000
= $89,600
Net Income = EBT × Tax rate
= $89,600 × 21%
= $70,784
Answer:
Gross profit equals the difference between sales revenue and cost of goods sold.
Explanation:
The gross profit is calculated by subtracting total cost of goods sold from total sales. Both the total sales and cost of goods sold are found on the income statement.
Gross profit = Sales revenue - cost of goods sold.
It is one of three profit metrics used in business statement reports
Answer:
Option "C" is the correct answer to the following question.
Explanation:
Given:
Issue price of share = $100
Market price per share = $100
Preferred stock dividend rate = 7%
Computation of dividend per year :
Dividend per year = Issue price of share × Preferred stock dividend rate
Dividend per year = $100 × 7%
Dividend per year = $7
Dividends are always paid to preferred stock at fixed rates at face value.