Answer:
This question is a mixture of different distinct questions,Dr Zhivago Diagnostics is different question, another question starts from the sales of $3 million,another one begins from Jim Short's Co and lastly Stud Clothiers is another question.
My approach is to solve the first question Dr Zhivago Diagnostics Corp.
Find the attached full question on Dr Zhivago Diagnostics Corp.
Profit margin is 25.18%
Income after taxes $ 404,110.00
Profit margin thereafter is 20.42%
Explanation:
Profit margin =operating profit/sales
operating profit is $705,000
Sales is $2,800,000
Profit margin =%705,000/$2,800,000=25.18%
When sales increase by 10% and costs of good sold increased by 20%
operating profit is $ 629,000.00
Sales is $ 3,080,000.00
operating margin=$629,000/$3,080,000=20.42%
Profit after tax is $ 404,110.00
since the question is similar to excel format. I decided to do detailed calculations in excel as in the attached.
