Calculate the earnings before interest and taxes

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Reference no: EM131939399

Use the following data to construct an income statement for cheryl's posters:

Sales Price: $20 per unit

Variable Cost: $ 10 per unit

Fixed Cost: $ Sales in units: $1000

Required:

1. Calculate the Earnings before Interest and Taxes for Cheryl's Posters using the data provided above.

2. Prepare two pro forma statements assunimg:

A 50% increase in sales (1500)

A 50% decrease in sales (500)

3. What is the impact on earnings before interest and taxes (EBIT) of the 50% increase/decrease in sales?

4. Explain using the concept of leaverage.

Reference no: EM131939399

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