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Sherpa Manufacturing has the following income statement for 6,000 units:
Sales $600,000Variable costs 360,000Contribution margin 240,000Fixed costs 80,000Net income $160,000
(a) At what sales volume (in sales dollars) does Sherpa break even?
(b) At what sales volume (in units) does Sherpa break even?
(c) Given the income statement above, compute the margin of safety.
(d) What level of sales volume must be attained to reach net income of $200,000?
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