contribution margin concepts

Contribution Margin Concepts

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

Fixed Variable Total Sales

$1,500,000 Costs

Goods sold

675,000

Labor

$320,000 120,000

Supplies

4,000 10,000

Utilities

24,000 26,000

Rent

48,0000

Advertising

12,000 49,000

Miscellaneous

12,000 20,000

Total costs

$420,000 $900,000 (1,320,000) Net income

$ 180,000

Required

(a.) Determine the annual break-even dollar sales volume.

Contribution margin ratio: Answer

Annual break-even dollar sales volumes: $Answer

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

$Answer

(d.) What is the annual break-even dollar sales volume if management makes a decision that increases fixed costs by $60,000?

Contribution Margin Concepts The following information is taken from the 2017 records of Hendrix's Guitar Center. Fixed Sales Costs Goods sold Labor Supplies Utilities Rent Advertising Miscellaneous Variable Total $1,500,000 675,000 $320,000 120,000 4,000 10,000 24,000 26,000 48,000 0 12,000 49,000 12,000 20,000 $420,000 $900,000 (1,320,000) Total costs Net income $ 180,000 Required (a.) Determine the annual break-even dollar sales volume. Contribution margin ratio: Answer 0 Annual break-even dollar sales volumes: $Answer 0 (b.) Determine the current margin of safety in dollars. $Answer 0 (d.) What is the annual break-even dollar sales volume if management makes a decision that increases fixed costs by $60,000