IS-lOA. (Break-even point and profit margin) Mary Clark, a recent graduate of Clarion South University, is planning to open a new wholesaling operation. Her target operating profit margin is 26 percent. Her unit contribution margin will be 50 percent of sales. Average annual sales are forecast to be $3,250,000.

a.ı How large can fixed costs be for the wholesaling operation and still allow the 26 percent operating profit margin to be achieved?

b. What is the break-even point in dollars for the firm?