16.10

Break-Even in Sales Revenue, Margin of Safety Sports-Reps, Inc., represents professional athletes and movie and television stars. The agency had revenue of $12,300,000 last year, with total variabie costs of $6,150,000 and fixed costs of $2,150,000. Required: 1. What is the contritution margin ratio for 5 ports-Reps based on last year's data? Round your answer to two decimal places. (Express as a decimal-based amount rather than a whole percent.) What is the breakeven point in sales revenue? 2. What was the margin of safety for 5 ports-Reps last year? 3. One of 5 ports-Reps's agents proposed that the firm begin cultivating high school sports stars around the nation. This proposal is expected to increase revenue by $220,000 per year, with increased fixed costs of $108,400. Is this proposal a good idea