Assume Strands, a local hair salon, provides cuts, perms, and hairstyling services. Annual fixed costs are $150,000, and variable costs are 40 percent of sales revenue. Last year's revenues totaled $300,000. (a) Determine its break-even point in sales dollars.
$Answer 375,000 wrong
(b) Determine last year's margin of safety in sales dollars.
$Answer 75,000 wrong
(c) Determine the sales volume required for an annual profit of $80,000.
Round your answer to the nearest dollar.
$Answer 316,667 wrong
Multiple Product Planning with Taxes
In the year 2017, Pyramid Consulting had the following contribution income statement:
PYRAMID CONSULTING
Contribution Income Statement
For the Year 2017
Sales revenue $ 1,300,000
Variable costs
Cost of services $ 420,000
Selling and administrative 200,000 (620,000)
Contribution margin 680,000
Fixed Costs -selling and administrative (285,000)
Before-tax profit 395,000
Income taxes (36%) (142,200)
After-tax profit $ 252,800
D) What is the break-even point in sales revenue if management makes a decision that increases fixed costs by $57,000?
Use rounded contribution margin ratio (2 decimal places) for your calculation.
$ 657,692 wrong