Profitability Analysis Assume Strands, a local hair salon, provides cuts, perms, and hairstyling services. Annual fixed costs

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Profitability Analysis Assume Strands, a local hair salon, provides cuts, perms, and hairstyling services. Annual fixed costs are \($150,000\), and variable costs are 40 percent of sales revenue. Last year’s revenues totaled $300,000.

Required

a. Determine its break-even point in sales dollars.

b. Determine last year’s margin of safety in sales dollars.

c. Determine the sales dollar required for an annual profit of $80,000.

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Managerial Accounting

ISBN: 9781618532350

8th Edition

Authors: Morse Hartgraves

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