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Griffin's Steel Parts produces parts for the automobile industry. The company has monthly fixed expenses of $610,000 and a contribution margin of 80% of revenues.
Griffin's Steel Parts produces parts for the automobile industry. The company has monthly fixed expenses of $610,000 and a contribution margin of 80% of revenues.
1. Compute Griffin's Steel Parts' monthly breakeven sales in dollars.
2. Use the contribution margin ratio to project operating income (or loss) if revenues are $540,000 and if they are $1,030,000.
3. Do the results in Requirement 2 make sense given the breakeven sales you computed in Requirement 1? Explain.
Requirement 1. Compute Griffin's Steel Parts' monthly breakeven sales in dollars. Begin by identifying the formula. =Breakevensalesindollars Compute Griffin's Steel Parts' monthly breakeven sales in dollars. (Round your answer up to the nearest whole number.) The breakeven sales in dollars is Requirement 2. Use the contribution margin ratio to project operating income (or loss) if revenues are $540,000 and if they are $1,030,000. $1,030,000. (Enter the contribution margin ratio as a whole percent. Enter losses with a minus sign or parentheses.) Griffin's Steel Parts Operating Income Projection at Different Sales Levels \begin{tabular}{ll} \hline & \multicolumn{1}{c}{ If revenues } \\ & are $540,000 \\ \hline Sales revenue & \\ \hline & \\ Contribution margin ratio & \\ Fixed costs & \\ \hline \end{tabular}
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