Rimier corp forecasts sales of 647,000for 2016. Assume the firm has fixed costs

Question

Rimier corp forecasts sales of 647,000for 2016. Assume the firm has fixed costs of 245000 and variable costs amounting to 31% of sales. Operating expenses are estimated to include fixed costs of 26000 and a variable portion equal to 6.6% of sales. Interest expenses for the coming year are estimated to be 19000. Estimate rimier net profits before taxes for 2016. I dont think my answers are right . This is what I need sales revenue, fixed costs , variable costs, gross profit, fixed expense, variable expense, operating profit interest exoense( all fixed), and net profit before taxes

Explanation / Answer

sales revenue = 647000

Fixed costs = 245000

Variable costs = 31%*647000 = 200570

Fixed Operating expenses = 26000

Variable Operating expenses =6.6%*647000 = 42702

Interest expenses = 19000

Cost of Good Sold = Fixed costs + Variable costs - Fixed Operating expenses - Variable Operating expenses

Cost of Good Sold = 245000 + 200570 - 26000 - 42702

Cost of Good Sold = $ 376,868

Gross profit = Sales - Cost of Good Sold

Gross profit = 647000 - 376868

Gross profit = 270132

Fixed expense = 26000

variable expense = 42702

Operating profit = Gross profit - Fixed expense  -  variable expense

Operating profit = 270132 - 26000-42702

Operating profit = 201430

Interest expense( all fixed) = 19000

Net profit before taxes = Operating profit - Interest expense( all fixed)

Net profit before taxes = 201430 - 19000

Net profit before taxes = 182430

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