Question: In planning its operations for next year based on a sales forecast of $3,000,000, Jan's Auto Company, Inc. prepared the following estimated costs and expenses:
In planning its operations for next year based on a sales forecast of $3,000,000, Jan's Auto Company, Inc. prepared the following estimated costs and expenses:
| Variable | Fixed | |
| Direct Material | $ 650,000 | |
| Direct Labor | 700,000 | |
| Factory Overhead | 300,000 | $450,000 |
| Selling Expense | 120,000 | 180,000 |
| General Admin. Expense | 30,000 | 70,000 |
| TOTAL | $1,800,000 | $700,000 |
Calculate sales dollars at the break-even point. (Please include how to solve the problem.)
| a. | $1,125,000 |
| b. | $1,750,000 |
| c. | $2,000,000 |
| d. | $2,650,000 |
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