In: Accounting
Revenue 80,000
Variable Costs 45,000
Contribution Margin 35,000
Fixed Cost 15,000
Pre-tax Income 20,000
Income Taxes (25%) 5,000
After-Tax Income 15,000
1. What is the Breakeven level of revenue?
2. What is the Margin of Safety of revenues?
3. If Fixed Cost were reduced by 10%, what would be the new breakeven revenue?
4. Given the current cost structure (ie. unchanged Fixed and Variable costs), how much revenue would be required to generate 50% more after-tax income?
5. Provide a revised Contribution Income Statement assuming this company achieves the higher level of after-tax revenue described in question 4.
Please show formulas. Thank you!