The management of Lambda Corporation has received the following forecast for the next year.

Sales revenue

$$600000$

Fixed cost

Variable cost

$$275000$

$270000$

Total cost

Net income

$545000$

$ $55000$

Capacity is a sales volume of $$800000.$

CASE STUDY $217$

$($a$)$ Compute

$($i$)$ the contribution margin: $($ii$)$ the contribution rate.

$($b$)$ Compute the break$-$even point

$($i$)$ in dollars;

$($i$)$ as a percent of capacity.

$($c$)$ Determine the break$-$even volume in dollars if fixed cost is increased by $$40000,$ while variable cost is held to $40\%$ of sales.