Mickey’s Restaurant had a net income last year of $40,000 after fixed costs of $130,000 and total variable costs of $80,000.
a. What was the restaurant’s break-even point in sales dollars?
b. If fixed costs in the current year rise to $140,000 and variable costs remain at the same percentage of sales as for last year, what will be the break-even point?
c. What sales in the current year will result in a profit of $50,000?