Vassalboro's

Steel Parts produces parts for the automobile industry. The company has monthly fixed expenses of

$460,000

and a contribution margin of

95%

of revenues.

Requirements

1.	Compute Vassalboro's Steel Parts' monthly break-even sales in dollars. Use the contribution margin ratio shortcut approach.
2.	Use the contribution margin ratio to project operating income (or loss) if revenues are $680,000 and if they are $1,400,000.
3.	Do the results in Requirement 2 make sense given the break-even sales you computed in Requirement 1? Explain.

Requirement 1. Compute

Vassalboro's

Steel Parts' monthly break-even sales in dollars. Use the contribution margin ratio shortcut approach.Select the labels to complete the formula, and then enter the amounts to calculate

Vassalboro's

Steel Parts' monthly break-even sales in dollars. (Enter ratios as decimals. Round your answer up to the nearest whole dollar.)

(	Fixed expenses	+	Operating income	)	/	Contribution margin ratio	=	Break-even sales in dollars
(		+		)	/		=