One size fits all casket co income statement for 2008 is as follows
Sales................................................$3,000,000
Cost of goods sold............................2,100,000
Gross profit.......................................900,000
Selling and administrative expense......450,000
Operating profit..................................450,000
Interest expense.................................75,000
Income before taxes...........................375,000.
Taxes (30%).......................................112,500
Income after taxes.............................. $262,500
a. Compute the profit margin for 2008.
b. Assume that in 2009 sales increase by 10 percent and cost of goods sold increases by 25 percent. The firm is able to keep all other expenses the same. Once again, assume a tax rate of 30 percent on income before taxes, what are income after taxes and the profit margin for 2009?