FINANCE 500- The firm wants to achieve a level of earnings before interest and taxes

| June 14, 2018

Problem 1Surf Bicycles Inc. Will manufacture and sell 200,000 units next year. Fixed costs will total $500,000, and variable costs will be 60% of sales. The bicycles will sell for $200 each. The firm wants to achieve a level of earnings before interest and taxes of $250,000. How many units must they sell to achieve that result?Problem 2Alpha Electronics has the following income statement:Sales400,000Total variable costs240,000Contribution margin160,000Fixed costs140,000EBIT20,000Calculate the new EBIT and percent change, assuming:1: Sales increase by 20%2: Sales decrease by 20%PLEASE SHOW WORK IF POSSIBLE !!!!

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