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skykoala735Lv1
28 Sep 2019
Dr. Zhivago Diagnostics Corp.'s income statement for 20X1 is asfollows:
Sales $ 2,710,000 Cost of goods sold 1,850,000 Gross profit $ 860,000 Selling and administrative expense 346,000 Operating profit $ 514,000 Interest expense 58,000 Income before taxes $ 456,000 Taxes (30%) 136,800 Income after taxes $ 319,200
a. Compute the profit margin for 20X1.(Input the profit margin as a percent rounded to 2 decimalplaces.)
b. Assume in 20X2, sales increase by 10 percentand cost of goods sold increases by 20 percent. The firm is able tokeep all other expenses the same. Once again, assume a tax rate of30 percent on income before taxes. What is income after taxes andthe profit margin for 20X2? (Input the profit margin as apercent rounded to 2 decimal places.)
Dr. Zhivago Diagnostics Corp.'s income statement for 20X1 is asfollows:
| Sales | $ | 2,710,000 | |
| Cost of goods sold | 1,850,000 | ||
| Gross profit | $ | 860,000 | |
| Selling and administrative expense | 346,000 | ||
| Operating profit | $ | 514,000 | |
| Interest expense | 58,000 | ||
| Income before taxes | $ | 456,000 | |
| Taxes (30%) | 136,800 | ||
| Income after taxes | $ | 319,200 | |
a. Compute the profit margin for 20X1.(Input the profit margin as a percent rounded to 2 decimalplaces.)
b. Assume in 20X2, sales increase by 10 percentand cost of goods sold increases by 20 percent. The firm is able tokeep all other expenses the same. Once again, assume a tax rate of30 percent on income before taxes. What is income after taxes andthe profit margin for 20X2? (Input the profit margin as apercent rounded to 2 decimal places.)
Beverley SmithLv2
28 Sep 2019