Homework Answers
a.
Break even point in sales dollars = Fixed cost / Contribution margin ratio
= 465,000/40%
= $1,162,500
b.
Break even point in sales dollars = Fixed cost / Contribution margin ratio
= 465,000/20%
= $2,325,000
c.
Sales to earn target profit = ( Fixed cost + Target profit ) / Contribution margin ratio
= (465,000+150,000)/40%
= $1,537,500
Kindly comment if you need further assistance. Thanks‼!
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