Using the same case, calculate the independent effects of a 2 percent increase in Gross Margin, a 2 percent decrease in the Tax Rate, and a 5 percent decrease in Sales. Sales Cost of goods sold Selling, general, and administrative expense Depreciation Research and development Total costs and expenses Operating Income Interest expense Earnings before Income Taxes Provision for Income Taxes Net Income Base Case 2% Increase in Gross Margin $2,110 $ 1,456 317 160 53 $ 1,986 $ 124 39 $85 $ 18 Colossal Chemical Corporation Year Ended December 31, 2021 ($000,000 omitted) $67 $ $ $ $ 2% Decrease in Tax Rate $ $ $ $ 5% Decrease in Sales

Using the same case, calculate the independent effects of a 2 percent increase in Gross Margin, a 2 percent decrease in the Tax Rate, and a 5 percent decrease in Sales. Sales Cost of goods sold Selling, general, and administrative expense Depreciation Research and development Total costs and expenses Operating Income Interest expense Earnings before Income Taxes Provision for Income Taxes Net Income Base Case 2% Increase in Gross Margin $2,110 $ 1,456 317 160 53 $ 1,986 $ 124 39 $85 $ 18 Colossal Chemical Corporation Year Ended December 31, 2021 ($000,000 omitted) $67 $ $ $ $ 2% Decrease in Tax Rate $ $ $ $ 5% Decrease in Sales

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter15: Financial Statement Analysis

Section: Chapter Questions

Problem 31BEB

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