Conway Electrical Services provides services to two types of clients: residential and commercial. The company$$s contribution margin income statement for the year is shown $($this is the base case$).$ Fixed costs are known in total, but Conway does not allocate fixed costs to each department.

image

Required:

Find the break$-$even point in sales dollars.

What is the margin of safety in sales dollars?

What amount of sales dollars is required to earn an annual profit of $$750,000?$

Refer to the base case shown previously. What would the operating profit be if the Commercial variable costs are $20$ percent higher than originally anticipated? How does this increase in Commercial variable costs impact the operating leverage of the company?