The management of Lambda Corporation has received the following forecast for the next year.

Capacity is a sales volume of $800 000.
(a) Compute
(i) The contribution margin;
(ii) The contribution rate.
(b) Compute the break-even point
(i) In dollars;
(ii) As a percent of capacity.
(c) Determine the break-even volume in dollars if fixed costs are increased by $40 000, while variable costs are held to 40% of sales.

Transcribed Image Text:

Sales revenue $600 000 Fixed costs Variable costs $275 000 270 000 Total costs Net income 545 000 S 55 000