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You have developed the following income statement for the Hugo Boss Corporation. It represents the most recent year's operations, which ended yesterday.
Sales$ 50,439,375
Variable costs(25,137,000)
Revenue before fixed costs$ 25,302,375
Fixed costs(10,143,000)
EBIT$ 15,159,375
Interest expense(1,488,375)
Earnings before taxes$ 13,671,000
Taxes at 50%(6,835,500)
Net income$ 6,835,500
Your supervisor in the controller's office has just handed you a memorandum asking for written responses to the following questions:
a. What is the firm's break-even point in sales dollars?
b. If sales should increase by 30 percent, by what percent would earnings before taxes (and net income) increase?
Productivity in the Service Sector We know that the challenges for operations managers in future will lie in increasing the productivity of the service sector. As agriculture
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