Ace Machinery showed the following operating budget for the next year.

Answer the following questions:
(a) Calculate the contribution margin and contribution rate.
(b) How much does Ace Machinery need to sell to break-even?
(c) If the company has to spend $250 000 on marketing, how much does Ace Machinery need to sell to break-even?
(d) If sales increase by 15%, what would the resulting net income be?

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Sales $2 300 000 $1 200 000 Fixed cost Total variable cost Total cost Net income 750 000 1 950 000 $ 300 000