Contribution Margin Concepts The following information is taken from the 2017 records of Hendrix's Guitar Center.

		Fixed	Variable	Total
Sales				$750,000
Costs
Goods sold			$337,500
Labor		$160,000	60,000
Supplies		2,000	5,000
Utilities		12,000	13,000
Rent		24,000	0
Advertising		6,000	24,500
Miscellaneous		6,000	10,000
Total costs		$210,000	$450,000	(660,000)
Net income				$ 90,000

Contribution margin ratio: Answer

Annual break-even dollar sales volumes: $Answer

(b.) Determine the current margin of safety in dollars. $Answer

(c.) What is the annual break-even dollar sales volume if management makes a decision that increases fixed costs by $35,000?

 

Answer rating: 100% (QA)

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