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Ace Machinery showed the following operating budget for the next year. Sales $2 300 000 Fixed cost $1 200 000 Total variable cost 750 000
Ace Machinery showed the following operating budget for the next year. Sales $2 300 000 Fixed cost $1 200 000 Total variable cost 750 000 Total cost 1950 000 Net income $ 300 000 Answer the following questions: (a) Calculate the contribution margin and contribution rate. (b) How much does Ace Machinery need to sell to break-even? (c) If the company has to spend $250 000 on marketing, how much does Ace Machinery need to sell to break-even? (d) If sales increase by 15%, what would the resulting net income be?
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