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Question - Lawn Master Company, a manufacturer of riding lawn mowers, has a projected income for the coming year as follows:
Sales
$33,000,000
Operating expenses:
Variable expenses
$26,400,000
Fixed expenses
3,300,000
Total expenses
29,700,000
Operating profit
$3,300,000
Required -
1. Determine the breakeven point in sales dollars.
2. Determine the required sales in dollars to earn a before-tax profit of $3,900,000.
3. What is the breakeven point in sales dollars if the variable expenses increases by 12%?
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