Question
ASDF Corporate Income Statement
Current Year
Units Sold
100,000
$37.84
$3, 784,000
$1,284,000
Unit Price
Sales Revenue
Variable Expenses (Materials &
Labor)
Fixed Expenses (Marketing &
Overhead)
Earnings Before Interest & Taxes
$350,000
$2,150,000
(ЕВIT)
$198,000
$1,952,000
Paid Interest
Earnings Before Taxes (EBT)
$664,000
Тахes
Net Income after Taxes (NIAT)
$1,288,000
$258,000
Dividends
Retained Earnings
$1,030,000
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Transcribed Image Text:ASDF Corporate Income Statement Current Year Units Sold 100,000 $37.84 $3, 784,000 $1,284,000 Unit Price Sales Revenue Variable Expenses (Materials & Labor) Fixed Expenses (Marketing & Overhead) Earnings Before Interest & Taxes $350,000 $2,150,000 (ЕВIT) $198,000 $1,952,000 Paid Interest Earnings Before Taxes (EBT) $664,000 Тахes Net Income after Taxes (NIAT) $1,288,000 $258,000 Dividends Retained Earnings $1,030,000
15. Given the above Degree of Combined Leverage (DCL), a 15% increase in sales would lead to what
Percent and Dollar increase in Net Income After Taxes (NIAT)?
% Increase in NIAT
= % Increase in Sales X DCL
х
$Increase in NIAT
= % Increase in NIAT X NIAT
х
expand button
Transcribed Image Text:15. Given the above Degree of Combined Leverage (DCL), a 15% increase in sales would lead to what Percent and Dollar increase in Net Income After Taxes (NIAT)? % Increase in NIAT = % Increase in Sales X DCL х $Increase in NIAT = % Increase in NIAT X NIAT х
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