Applied Financial Analysis
Answer the following: Meyerson's Bakery is considering the addition of a new line of pies to its product offerings. it is expected that each pie will sell for $15 and the variable costs per pie will be $9. Total fixed operating costs are expected to be $20,000. Meyerson's faces a marginal tax rate of 35%, will have interest expenses associated with this line of $3,000 and expects to sell about 4,000 pies in the first year. a. Create an income statement for the pie line's first year. Is the line expected to be profitable? b. Calculate the operating break-even point in both units and dollars.