A company has a margin of safety of 25%, a contribution margin ratio of 30%, and sales of $1,000,000.
(a) What was the break-even point?
(b) What was the operatingincome?
(c) If neither the relationship between variable costs and salesnor the amount of fixed costs is expected to change in the next year; how (c) much additional operating income can be earned by increasing sales by $ \$ 110,000 $ ?

Question

A company has a margin of safety of 25%, a contribution margin ratio of 30%, and sales of $1,000,000.
 (a) What was the break-even point?
(b) What was the operatingincome?
(c) If neither the relationship between variable costs and salesnor the amount of fixed costs is expected to change in the next year; how (c) much additional operating income can be earned by increasing sales by $ \$ 110,000 $ ?

Quizplus · Accepted Answer

The Answer of A company has a margin of safety of 25%, a contribution margin ratio of 30%, and sales of $1,000,000.
 (a) What was the break-even point?
(b) What was the operatingincome?
(c) If neither the relationship between variable costs and salesnor the amount of fixed costs is expected to change in the next year; how (c) much additional operating income can be earned by increasing sales by $ \$ 110,000 $ ?

A Company Has a Margin of Safety of 25%, a Contribution