Lawn Master Company, a manufacturer of riding lawn mowers, has a projected income for 2010 as follows:

Required
1. Determine the breakeven point in sales dollars.
2. Determine the required sales in dollars to earn a before-tax profit of $7,050,000.
3. What is the breakeven point in sales dollars if the variable cost increases by 10percent?
 

Transcribed Image Text:

Sales S46,000,000 Operating expenses Variable expenses $32,200,000 7,500,000 Fixed expenses Total expenses 39,700,000 $ 6,300,000 Operating Profit Sales S46,000,000 Operating expenses Variable expenses $32,200,000 7,500,000 Fixed expenses Total expenses 39,700,000 $ 6,300,000 Operating Profit

Answer rating: 100% (QA)

1 To calculate the breakeven point in units use the formula BreakEven point units Fixed Costs Sales price per unit Variable costs per unit or in sales dollars using the formula BreakEven point sales d... View the full answer