Question: Tracking Ltd's pro forma income statement for 2014 is shown below. Required: a. Compute the contribution margin ratio b. Calculate the breakeven sales revenue (round
Tracking Ltd's pro forma income statement for 2014 is shown below. Required: a. Compute the contribution margin ratio b. Calculate the breakeven sales revenue (round to the nearest S) c. Compute the margin of safety, based on the estimated sales revenue for 2014. d. Prepare an income statement showing net income if the firm sold 350000 units in 2014. e. The business wishes to earn an after-tax profit of $2500 000 in 2014. How many units would it have to sell? Assume a tax rate of 25%. f. Tracking has been advised that it could sell 10% more units if it did the following: i. Reduce selling price by 5% ii. Hire two more salesmen, who would be paid $35000 each annually iii. Use different materials, which would reduce variable manufacturing costs by 8% Compute the company's breakeven units, assuming that the new plans were implemented
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