Question
Brads Cigar Box Guitars is located in Ames, Iowa. Assume the following information comes from the companys prior year records. Fixed Variable Total Sales
Brads Cigar Box Guitars is located in Ames, Iowa. Assume the following information comes from the companys prior year records.\ \ Fixed Variable Total\ Sales 800,000\ Costs \ Goods Sold 346,000 \ Labor 1t80,000 40,000 \ Supplies 10,000 4,000 \ Utilities 9,000 5,000 \ Rent 48,000 - \ Advertising 10,000 - \ Miscellaneous 10,000 5,000 \ Total Costs 267,000 400,000 (667.000)\ Net Income 133,000\ \ a. Determine the annual break-even sales volume\ \ b. Determine the current margin of safety in dollars\ \ c. Prepare a cost-volume-profit graph for the store. Label both axes in dollars with maximum values of $1,000,000. Draw a vertical line on the graph for the current (i.e., $800,000) sales level, and label total variable costs, total fixed costs, and total profits at $8000,000 sales.\ \ d. What is the annual break-even dollar sales volume if management makes a decision that increases fixed costs by $50,000?
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