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Solve the missing information Computing Break-Even and Margin of Safety Assume that last year, Cliff Consulting, a firm in Berkeley, CA, had the following contribution
Solve the missing information
Computing Break-Even and Margin of Safety Assume that last year, Cliff Consulting, a firm in Berkeley, CA, had the following contribution income statement. CLIFF CONSULTING Contribution Income Statement For the Year Ended September 30 Sales revenue Variable costs Cost of services Selling and administrative Contribution margin Fixed costs - selling and administrative Before-tax profit Income taxes 21 % After-tax profit REQUIRED S576,ooo 72,000 648,000 792,000 528,000 264,000 55,440 $208,560 a. Determine the annual break-even point in sales revenue. $ 960000 b. Determine the annual margin of safety in sales revenue. 480000 c. What is the break-even point in sales revenue if management makes a decision that increases fixed costs by $80,000? Note: Round up to the nearest dollar, enter $80 for $79.2 $ 1105455 d. With the current cost structure, including fixed costs of $528,000, what dollar sales revenue is required to provide a before-tax profit of $350,000? Note: Round up to the nearest dollar, enter $80 for $79.2 $ 1596364 e. Prepare an abbreviated contribution income statement to verify that the solution to requirement d will provide the desired before-tax profit. Note: Round all answers to the nearest dollar, enter $49 for $49.3, or $50 for $49.7 s s Check x x x x x
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