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Current sales revenue is $5,000, total variable costs are $2,000, and total fixed costs are $2,000 (no data on units). a) Compute the contribution margin

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Current sales revenue is $5,000, total variable costs are $2,000, and total fixed costs are $2,000 (no data on units). a) Compute the contribution margin ratio: CMR= 2000 x b) Write down the CVP relation (version 2): profit as a function of sales revenue. Profit = .6 * Revenue - 2000 (e.g., if profit = 0.1* Revenue-500, enter 0.1 in the first box and 500 in the second box). c) Predict profit at sales revenue of $10,000: 4000 d) Your boss gave you a profit target of $5,000. How much do you need to sell in dollars to meet this target? e) Compute the breakeven revenue: f) When sales revenue increases by $1,000 (from any initial level in the relevant range), profit increases by: CMR $1,000 = $600 not enough information (1-CMR)* $1,000 = $400

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