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a. 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
a. 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 maximum 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 increases fixed costs by $50,000? Fixed Variable Total Sales......... $800,000 Costs Goods sold........ $346,000 Labor....... $180,000 40,000 Supplies 10,000 4,000 Utilities 9,000 5,000 Rent Advertising Miscellaneous.... Total costs..... Net income..... 10,000 5,000 $267,000 $400,000 (667,000) $133,000 48,000 10,000
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