Meyersons Bakery is considering the addition of a new line of pies to its product offerings. It is expected that each pie will sell for $10 and the variable cost per pie will be $3. 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 2,500 pies in the first year.;a. Put together 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.;c. How many pies would Meyerson's need to sell in order to achieve earnings, before interest and taxes, of $15,000?
Operating break-even point in both units and dollars
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