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The income statement of Mark Zeus company is as follows: Sales Revenue Variable costs Contribution margin Fixed costs Before Tax Profit $600,000 (300,000) $300,000
The income statement of Mark Zeus company is as follows: Sales Revenue Variable costs Contribution margin Fixed costs Before Tax Profit $600,000 (300,000) $300,000 (200,000) $100,000 1. Refer to Mark Zeus Company. What was the company's Break Even Point in sales? 2. If the unit sales price for Mark Zeus's sole product was $20, how many units will the company need to sell to have a profit of $80,000? 3. Why is it important to know the relationship between Cost, Volume and Profit? How will it help Mark Zeus company in its decision making? 4. If the company increases its Fixed Costs by 10%, by what percentage will Break Even Point be affected? What does this result imply?
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