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Grover's Steel Parts produces parts for the automobile industry. The company has monthly fixed costs of $640,220 and a contribution margin of 85% of revenues.
Grover's Steel Parts produces parts for the automobile industry. The company has monthly fixed costs of $640,220 and a contribution margin of 85% of revenues. Read the requirements. Requirement 1. Compute Grover's monthly breakeven sales in dollars. Use the contribution margin ratio approach. Select the labels and enter the amounts to calculate the breakeven point in dollars using the contribution margin approach. (Enter a "0" for any zero amounts. Round your answer to the nearest dollar. Abbreviation used: CM = contribution margin.) + ) - = Required sales in dollars + X Requirements 1. Compute Grover's monthly breakeven sales in dollars. Use the contribution margin ratio approach. 2. Use contribution margin income statements to compute Grover's monthly operating income or operating loss if revenues are $520,000 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. Print Done
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