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Exercise 4-12 CVP Analysis, Profit Equation Lake Stevens Marina has estimated that fixed costs per month are $350,000 variable cost per dollar of sales is
Exercise 4-12 CVP Analysis, Profit Equation Lake Stevens Marina has estimated that fixed costs per month are $350,000 variable cost per dollar of sales is $0.30 The selling price per dollar of sales is: and $1.00 Required a. What is the break-even point per month in sales dollars given the following information? Selling price per dollar of sales Variable cost per dollar of sales Contribution margin per dollar of sales Break-even point = b. What level of sales is needed for a monthly profit of $70,000 ? Sales required = = $1,000,000 What is the c. For the month of July, the marina anticipates sales of expected level of profit? Expected profit = = What-if? Consider the following after you have completed the requirements of E4-12. Determine the effect on the break-even point in sales dollars considering each of the following independently. 1. Total fixed costs increase to $365,000. Break-even point = 2. Variable costs decline to $0.25 per sales dollar. Break-even point = . 3. The anticipated sales volume increases to $1,100,000. Break-even point = = Comment on the BEPs from the above analyses in questions 1,2,3
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