Given the following abbreviated income statement, what would the statement look like for 2020 if sales are expected to grow 6% and fixed costs will remain the same as 2019? Calculate and show the 2020 statement side by side with the 2019 statement. Also, please calculate and explain the breakeven point for the company 2019 and 2020. Calculate the and show the sales dollars required (based on 2020 statement) if the company desired an operating margin of $1,250,000. Finally, describe the actions the company might take to lower its breakeven point in sales dollar and, given a very competitive market, which actions might be more desirable than others?

 

Sales ... ww.S 2,500,000 ... 1,250,000 Cost of Sales Contribution Margin. $ 1,250,000 C.M. % .... Fixed Costs.. Fix Costs % .. . . Operating Margin w$ 700,000 O. M. %... 50% $ _ 550,000 22% 28%