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Problem - Profitability Analysis - Assume Strands Salon, a San Diego hair salon, provides cuts, perms, and hairstyling services. Annual fixed costs are $225,000, and variable costs are 45% of sales revenue. Last year's revenues totaled $450,000.
Required -
a. Determine its break-even point in sales dollars.
b. Determine last year's margin of safety in sales dollars.
c. Determine the sales dollar required for an annual pretax profit of $200,000.
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