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Please clearly show step-by-step calculations and logic and technique applied in arriving at answer. ...

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Accounting

Please clearly show step-by-step calculations and logic and technique applied in arriving at answer.

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Determination of profitability (LO2-1) 12. Lemon Auto Wholesalers had sales of $1,000,000 last year, and cost of goods sold represented 78 percent of sales. Selling and administrative expenses were 12 percent of sales. Depreciation expense was $11,000 and interest expense for the year was $8,000. The firm's tax rate is 30 percent. a. Compute earnings after taxes. b. Assume the firm hires Ms. Carr, an efficiency expert, as a consultant. She suggests that by increasing selling and administrative expenses to 14 percent of sales, sales can be increased to $1,050,900. The extra sales

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