Question
Klinken Corporations contribution margin ratio on the sale of its most popular product is 52%. The product is priced at $94, annual fixed expenses are
Klinken Corporations contribution margin ratio on the sale of its most popular product is 52%. The product is priced at $94, annual fixed expenses are $870,000. Management is evaluating two options: (1) lowering variable costs by 15% and (2) reducing fixed expenses by 15%.
Required:
Calculate the current level of break-even sales in dollars, as well as the break-even sales for the two options. (Do not round intermediate calculations. Round your answers to the nearest whole dollar amount.)
Break-even sales in dollars-
Option 1 break-even sales in dollars-
Option 2 break-even sales in dollars-
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