Akron Corporation had a margin of safety of $500,000 last month, with sales revenue of $1,250,000 and fixed costs of $150,000. Required:
a. What are break-even sales?
b. What is the contribution margin ratio?
c. How much profit did Akron earn last month?
d. How much would sales have to be for Akron to earn a profit of $500,000?
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