Contribution Margin Concepts

The following information is taken from the 2017 records of Hendrix's Guitar Center.

FixedVariableTotalSales$2,250,000CostsGoods sold1,012,500Labor$480,000180,000Supplies6,00015,000Utilities36,00039,000Rent72,0000Advertising18,00073,500Miscellaneous18,00030,000Total costs$630,000$1,350,000(1,980,000)Net income$ 270,000

Required

(a.) Determine the annual break-even dollar sales volume.

Contribution margin ratio:Answer

Annual break-even dollar sales volumes: $Answer

(b.) Determine the current margin of safety in dollars.

$Answer

(c.) What is the annual break-even dollar sales volume if management makes a decision that increases fixed costs by $100,000?

$Answer

PreviousSave Answers

Next