As a first step in your work, you compiled the following information regarding the cost structure of a company:
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Output Level
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80,000 units
|
|
Operating Assets
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$4,000,000
|
|
Operating Asset Turnover
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8 times
|
|
Return on Operating Assets
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32%
|
|
Degree of Operating Leverage
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6 times
|
|
Interest Expense
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$600,000
|
|
Tax Rate
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35%
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Prepare an analytical income statement. What is the firm's break-even point in sales dollars? If sales should increase by 30 percent, by what percentage would EBT and net income increase? Please show any equations or math for solutions.