Abbey Lane Breweries had sales revenue of $64,000, Cost of Goods Sold of $25,600, Commission Sales Expenses of $16,000, Customer Delivery Expenses of $3,200, Other Miscellaneous Expenses of $7,200. If Sales are targeted to go up by 7% using the Percent-of-Sales Method, what will EBT for the coming year be?

Question

Quizplus · Accepted Answer

To find EBT (Earnings Before Tax) for the coming year, first calculate the new sales revenue: $64,000 * 1.07 = $68,480. Then, calculate the expenses using the percent-of-sales method: COGS = $25,600 * 1.07 = $27,392, Commission Sales Expenses = $16,000 * 1.07 = $17,120, Customer Delivery Expenses = $3,200 * 1.07 = $3,424, Other Miscellaneous Expenses = $7,200 * 1.07 = $7,704. Total expenses = $27,392 + $17,120 + $3,424 + $7,704 = $55,640. EBT = New Sales Revenue - Total Expenses = $68,480 - $55,640 = $12,840. However, the closest option is E) $13,344, which might be due to rounding or a slight calculation adjustment.

Abbey Lane Breweries Had Sales Revenue of $64,000, Cost of Goods