Break-even point in dollars

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Q # 12

The accounting firm of Smith and Thompson has been studying the sales requirements of the Frisco Bottling Company. In the course of the study, the managing partner submits the following estimated data:

 

Sales

$900,000

Fixed marketing expenses

$71,000

Direct materials

206,200

Variable marketing expenses

80,000

Direct Labor

165,200

Fixed administrative expenses

9,500

FOH

171,896

Variable administrative expenses

4,000

Variable FOH

102,600

 

 

 

Required:

  1. Break-even point in dollars
  2. Margin of Safety
  3. Rate of Margin of Safety
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