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Question - 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 percent 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 volume required for an annual pretax profit of $200,000.
What audit opinion would be provided in the audit report if the financial statements do not include a provision or allowance for this amount
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