Pinches Salt Company has the following income statement: Sales $5,000,000 Variable Operating Cost 1,000,000 Fixed Operating Cost 2,000,000 EBIT $2,000,000 Interest 500,000 EBT $1,500,000 Tax (at 40%) 600,000 EAT $ 900,000 Preferred Dividends 100,000 Earnings available for CS $ 800,000 Shares Outstanding 400,000 Compute Pinches DOL, DFL, and DTL If sales increase to $5,500,000, what is the forecast of the EPS. You need to make a new income statement to complete this problem.
Pinches Salt Company has the following income statement:
Sales $5,000,000
Variable Operating Cost 1,000,000
Fixed Operating Cost 2,000,000
EBIT $2,000,000
Interest 500,000
EBT $1,500,000
Tax (at 40%) 600,000
EAT $ 900,000
Preferred Dividends 100,000
Earnings available for CS $ 800,000
Shares Outstanding 400,000
- Compute Pinches DOL, DFL, and DTL
- If sales increase to $5,500,000, what is the
forecast of the EPS. You need to make a new income statement to complete this problem.
** You will need this formula to complete this problem**
Here it is: DOL at base $ sales TR is TR-TVC/TR-TVC-FC
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