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Contribution Margin Concepts The following information is taken from the 2017 records of Hendrix's...

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Accounting

Contribution Margin Concepts
The following information is taken from the 2017 records of Hendrix's Guitar Center.
Fixed Variable Total
Sales $1,500,000
Costs
Goods sold 675,000
Labor $320,000120,000
Supplies 4,00010,000
Utilities 24,00026,000
Rent 48,0000
Advertising 12,00049,000
Miscellaneous 12,00020,000
Total costs $420,000 $900,000(1,320,000)
Net income $ 180,000
Required
(a.) Determine the annual break-even dollar sales volume.
Contribution margin ratio: Answer
Annual break-even dollar sales volumes: $Answer
(b.) Determine the current margin of safety in dollars.
$Answer
(c.) What is the annual break-even dollar sales volume if management makes a decision that increases fixed costs by $60,000?
$Answer

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