William's Steel Parts produces parts for the automobile industry. The company has monthly fixed expenses of $620,000 and a contribution margin of 85% of revenues. William feels like he's in a giant squeeze play. The automotive manufacturers are demanding lower prices, and the steel producers have increased raw material costs. William's contribution margin has shrunk to 65% of revenues. The company's monthly operating income, prior to these pressures, was $247,000. Read the requirements Requirement 1. To maintain this same level of profit, what sales volume (in sales revenue) must William now achieve? Begin by identifying the formula to compute the sales in units at various levels of operating income using the contribution margin approach. Target salos in dollars * Requirements - 1. To maintain this same level of profit, what sales volume (in sales revenue) must William now achieve? 2. William believes that his monthly sales revenue will only go as high as $1,020,000. He is thinking about moving operations overseas to cut fixed costs If monthly sales are $1,020,000, by how much will he need to cut fixed costs to maintain his prior profit level of $247,000 per month? Print Done