What is the annual break-even dollar sales volume

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Reference no: EM133091729

Question - Contribution Margin Concepts - The following information is taken from the 2017 records of Hendrix's Guitar Center.

 

Fixed

Variable

Total

Sales

 

 

$1,350,000

Costs

 

 

 

Goods sold

 

607,500

 

Labor

$288,000

108,000

 

Supplies

3,600

9,000

 

Utilities

21,600

23,400

 

Rent

43,200

0

 

Advertising

10,800

44,100

 

Miscellaneous

10,800

18,000

 

Total costs

$378,000

$810,000

(1,188,000)

Net income

 

 

$162,000

Required -

(a) Determine the annual break-even dollar sales volume.

(b) Determine the current margin of safety in dollars.

(c) What is the annual break-even dollar sales volume if management makes a decision that increases fixed costs by $55,000?

Reference no: EM133091729

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