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16-11. Profitability Analysis Assume Strands Salon , a San Diego hair salon, provides cuts, perms,...

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Accounting

16-11. Profitability Analysis Assume Strands Salon , a San Diego hair salon, provides cuts, perms, and hairstyling services. Annual fixed costs are $225,000, and variable costs are 45% of sales revenue. Last years revenues totaled $450,000.

Required

a. Determine its break-even point in sales dollars.

b. Determine last years margin of safety in sales dollars.

c. Determine the sales dollar required for an annual pretax profit of $200,000.

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