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Accounting

Problem:

ABC. Corp. has estimated the following income statement for its next fiscal year. Sales $20,000,000 Variable costs 6,000,000 Revenue before fixed costs 14,000,000 fixed costs 9,000,000 EBIT 5,000,000 Interest expense 900,000 earnings before taxes 4,100,000 taxes (35%) 1,435,000 net income 2,665,000

Required:

Question 1: What is the break even point in sales dollars for the firm?

Question 2: If the average unit cost is $20, what is the break even point in units?

Note: Please show how you came up with the solution.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M91173646

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