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-18. Contribution Margin Concepts DiPinto Electric Guitars & Basses sells musical instruments in Philadelphia. Assume the follow- ing information comes from the company's prior year
-18. Contribution Margin Concepts DiPinto Electric Guitars & Basses sells musical instruments in Philadelphia. Assume the follow- ing information comes from the company's prior year records. Chapter 15 Cost-Volume-Profit Analysis and Fixed Variable Total $800.000 Sales. Costs Goods sold Labor.. Supplies $346,000 40,000 4,000 5,000 $180,000 10,000 9,000 48,000 10,000 10,000 Utilities Rent Advertising Miscellaneous 5,000 Total costs. $267,000 $400,000 Net income. (667,000) $133,000 a. REQUIRED Determine the annual break-even dollar sales volume. b. Determine the current margin of safety in dollars. C. Prepare a cost-volume-profit graph for the guitar shop. Label both axes in dollars with maxi- mum values of $1,000,000. Draw a vertical line on the graph for the current ($800,000) sales level, and label total variable costs, total fixed costs, and total profits at $800,000 sales. d. What is the annual break-even dollar sales volume if management makes a decision that in- creases fixed costs by $50,000
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