CVP Analysis Lawn Master Company, a manufacturer of riding lawn mowers, has a projected income for 2010 as follows:
Sales |
| $46,000,000 |
Operating expenses |
|
|
Variable expenses | $32,200,000 |
|
Fixed expenses | 7,500,000 |
|
Total expenses |
| 39,700,000 |
Operating Profit |
| $ 6,300,000 |
Required
1. Determine the breakeven point in sales dollars.
2. Determine the required sales in dollars to earn a before-tax profit of $7,250,000.
3. What is the breakeven point in sales dollars if the variable cost increases by 10 percent?
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