Change in sales level


Reported sales of $2.4 million. Variable costs are 80% of sales and fixed costs are $160,000. The firm has a 35% tax rate and interest expense is $120,000.

If EPS is $3.75, what would the sales level have to change to before EPS would fall below $3.00?

Answer: $2.2 million

I need the calculation in order to compute this in the future. What formula do I use if I do not have the answer in front of me?

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Accounting Basics: Change in sales level
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