Answer:
$2,685,000
Explanation:
Sales = $7,500,000 ÷ $62.50
= 120,000 units
Contribution = Sales - Variable cost
= $7,500,000 - (120,000 × $38)
= $7,500,000 - $45,60,000
= $29,40,000
Net income (after taxes) = $165,750
Net income before taxes and interest:
= Net income (after taxes) × (100 ÷ 65)
= $165,750 × (100 ÷ 65)
= 255,000
Therefore,
EBIT = Contribution - Fixed cost
255,000 = $29,40,000 - Fixed cost
Fixed cost = $29,40,000 - 255,000
= $2,685,000
