DOL, DFL, DCL OF GENATRON MANUFACTURING COMPANY FOR 2013 AND 2014

QUESTION :

Here are the income statements for Genatron Manufacturing

Corporation for 2013 and 2014:

INCOME STATEMENT 2013 2014

Net sales $1,300,000 $1,500,000

Cost of goods sold 780,000 900,000

Gross profit $520,000 $600,000

General and administrative 150,000 150,000

Marketing expenses 130,000 150,000

Depreciation 40,000 53,000

Interest 45,000 57,000

Earnings before taxes $155,000 $190,000

Income taxes 62,000 76,000

Net income $93,000 $114,000

Assuming one-half of the general and administrative expenses are fixed

costs, estimate Genatron’s DOL, DFL, and DCL in 2013 and 2014.