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A proposed new investment has projected sales of $850,000. Variable costs are 60 percent of sales, and fixed costs are $174,000; depreciation is $75,000. Prepare a pro forma income statement assuming a tax rate of 30 percent. What is the projected net income

Answer :

Answer:

  • 63,700

Explanation:

Sales:                                                 850,000

Variable Cost: (850,000*60%) =      510,000

Contribution Margin = 850k-510k= 340,000

Fixed cost =                                       174,000

Depreciation =                                    75,000

Earnings Before Taxes =                    91,000

Taxes (30%) =                                      (27,300)

Net Income                                 63,700

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