ABC Corp. has estimated the following income statement for its ...

[ereecah]

ABC Corp. has estimated the following income statement for its next fiscal year.
 
  Sales 20,000,000
  Variable costs 6,000,000
  Revenue before fixed costs 14,000,000
  Fixed costs 9,000,000
  EBIT 5,000,000
  Interest expense 900,000
  Earnings before taxes 4,100,000
  Taxes (35) 1,435,000
  Net income 2,665,000
  a. What is the break-even point in sales dollars for the firm?
  b. If the average unit cost is 20, what is the break-even point in units?

Question 2

International expansion often occurs because it is generally easier for firms to expand the market
  for their products rather than to develop new products.
 
  Indicate whether the statement is true or false

[kingdude89]

Answer to Question 1

a. 9,000,000/(1 - (6,000,000/20,000,000)) = 12,857,143
b. 12,857,143/20 = 642,857 units

Answer to Question 2

TRUE