Solve using the Contribution Margin approach. Alpha Corp. expects to operate at 80% of capacity next year.

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Solve using the Contribution Margin approach.

Alpha Corp. expects to operate at 80% of capacity next year. Its forecast operating budget is: 

Sales revenue Fixed costs Total variable costs Total costs Net income $300,000 $800,000 $1,200,000 $1,100,000

a. What is Alpha’s break-even revenue?
b. What would be Alpha’s net income if it operates at full capacity?

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