An excerpt from the income statement of the Kelly Company follows. Estimated fixed costs in Year 1 are $660,000.

a. What percentage of sales revenue is variable cost?
b. What is the break-even point in sales dollars for Kelly Company?
c. Prepare a cost-volume-profit graph for Kelly Company.
d. If sales revenue falls to $2,500,000, what will be the estimated amount of profit?
e. What amount of sales dollars produces a profit of$1,000,000?

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KELLY COMPANY Income Statement Year Ended December 31, Year 1 Sales $3,000,000 Operating Expenses: Cost of Goods Sold....$1,425,000 Selling Costs Administrative Costs. 450,000 225,000 Total Operating Costs 2,100,000 $ 900,000 Profit