The Pelican Corporation has a variable cost ratio of 60 percent of sales and total fixed costs

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The Pelican Corporation has a variable cost ratio of 60 percent of sales and total fixed costs of \(\$ 1,000,000\) per year. The corporation expects the same variable cost ratio and fixed costs for the coming year.

{Required:}

(1) Calculate the breakeven point for the coming year.

(2) What income can be expected from a budgeted sales of \(\$ 2,800,000\) ?

(3) Calculate the level of sales required to produce an income of \(\$ 500,000\) after income taxes (assume a \(40 \%\) of income tax rate).

(4) If the current year's operating income was \(\$ 200,000\), calculate the necessary increase in sales revenue in the coming year for an operating income of \(\$ 300,000\).

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