Porterville Steel Parts produces parts for the automobile industry. The company has monthly fixed expenses of $750,000 and a contribution margin of 75% of revenues.

Requirements
1. Compute Porterville Steel Parts’ monthly breakeven sales in dollars.
2. Project operating income (or loss) if revenues are $550,000 and if they are $1,050,000.
3. Do the results in Requirement 2 make sense given the breakeven sales you computed in Requirement 1? Explain.