Nail Transformation has provided the following financial data for the last two financial periods.

The Manager, Hilda Polish, is beginning her planning for next year and requires the following information.
a. Break-even level of sales.
b. New machines are available for fast drying of nails and will cost $200000 to purchase and would lead to a reduction in variable costs of $0.50 per service. The new machines are to be depreciated$40 000 per year. What is the new break-even point?
c. What level of sales are required in 2014 to maintain the profit at $850000 if the fast drying machines are purchased.

Transcribed Image Text:

Nail services Sales Less Expenses Profit 2012 10 000 $1 000 000 500000 S500 000 2013 15 000 $1 500 000 650000 S850000