Pound Industries’ customer service department follows up on customer complaints by telephone inquiry. During a recent period, th
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Answer: The break even point in dollars is $2,000,000.
We calculate the break even point (BEP) in dollars as follows:
We calculate Contribution Margin ratio as :
Substituting the Contribution Margin Ratio in the break even point formula we get,
BEP = $2,000,000
Answer:
Explanation:
In the income statement, the total revenues and the total expenses are recorded.
If the total revenues are more than the total expenditure then the company earns net income
And, If the total revenues are less than the total expenditure then the company have a net loss
This net income or net loss would reflect in the statement of the retained earning account.
The calculation is shown below:
= Net Sales + interest revenue- cost of good sold - administrative expense - selling expenses - interest expense - income tax expense
where,
Income tax expense = (Net Sales + interest revenue- cost of good sold - administrative expense - selling expenses - interest expense) × income tax rate
= ($2,409,400 + $38,100 - $1,463,800 - $222,000 - $286,700 - $48,900) × 30%
= $426,100 × 30%
= $127,830
The preparation of the income statement is presented in the spreadsheet. Kindly find the attachment below:
