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ABC Corp. is planning its budget for the next year. The estimated sales are $5,000,000. The variable costs are projected to be 60% of sales,
ABC Corp. is planning its budget for the next year. The estimated sales are $5,000,000. The variable costs are projected to be 60% of sales, and fixed costs are expected to be $1,200,000.
- Prepare a projected income statement.
- Calculate the break-even point in sales dollars.
- Determine the margin of safety in percentage if the actual sales are $4,800,000.
- Discuss the implications of changes in fixed and variable costs on the break-even point.
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