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11. The Bayview Convenience Store sells a range of different products, such as milk, canned goods, hardware, and magazines. On average, the store marks up the goods it buys by 50%; thus, something that cost $1 would be sold for $1.50, and the gross margin would be one-third of the selling price. Fixed costs are $5,000 per month. Required Calculate the following: (a) The contribution margin ratio (b) The monthly break-even sales revenue (c) The sales revenue needed to make an operating profit of $2,000 per month

11. The Bayview Convenience Store sells a range of different products, such as milk, canned goods, hardware, and magazines. On average, the store marks up the goods it buys by 50%; thus, something that cost $1 would be sold for $1.50, and the gross margin would be one-third of the selling price. Fixed costs are $5,000 per month. Required Calculate the following: (a) The contribution margin ratio (b) The monthly break-even sales revenue (c) The sales revenue needed to make an operating profit of $2,000 per month

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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11. The Bayview Convenience Store sells a range of different products, such as milk, canned goods, hardware, and magazines. On average, the store marks up the goods it buys by 50%; thus, something that cost $1 would be sold for $1.50, and the gross margin would be one-third of the selling price. Fixed costs are $5,000 per month. Required Calculate the following: (a) The contribution margin ratio (b) The monthly break-even sales revenue (c) The sales revenue needed to make an operating profit of $2,000 per month
Transcribed Image Text:11. The Bayview Convenience Store sells a range of different products, such as milk, canned goods, hardware, and magazines. On average, the store marks up the goods it buys by 50%; thus, something that cost $1 would be sold for $1.50, and the gross margin would be one-third of the selling price. Fixed costs are $5,000 per month. Required Calculate the following: (a) The contribution margin ratio (b) The monthly break-even sales revenue (c) The sales revenue needed to make an operating profit of $2,000 per month
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