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Concept introduction:
Break-even point is a point at which the total sales equal the total costs. In the same manner, break-even sales mean that the volume of sales, equates to the cost of the company. We can say that the sale done just to recover the costs incurred by the company is the break-even sales.
1) The national breakeven revenue in dollars using contribution margin ratio. And, if average trade leads to $1,000 in revenue for National, how many trades must be made to breakeven.
2) The dollar revenues needed to earn a monthly target profit of $12,600, using equation approach.
3) A graph showing cost profit analysis.
4) The new breakeven point in trades, when average revenue increases to $1,500 per trade.
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Chapter 21 Solutions
Myaccountinglab With Pearson Etext -- Access Card -- For Horngren's Accounting, The Managerial Chapters
- What was the amount of net income for the year?arrow_forwardCrestwood Industries mixes together sugarcane residue and ethanol. After joint manufacturing costs of $3,500 have been incurred, the mixture separates into two products, biomass fuel and industrial alcohol. At the split-off point, biomass fuel can be sold for $6,500, and the alcohol can be sold for $10,500. The biomass fuel can be further processed at a cost of $7,500 to make bio-bricks, which could be sold for $17,500. The alcohol can be further processed at a cost of $8,500 to make a disinfectant, which could be sold for $16,500.What is the net increase (decrease) in operating income from bio-bricks?arrow_forwardNet loss for the year?arrow_forward
- Need helparrow_forwardYour company pays back $2 million on a loan it had received earlier from a bank. How does this transaction affect the accounting equation? a. Assets decrease by $2 million, liabilities are unchanged, and contributed capital decreases by $2 million. b. Assets are unchanged, and liabilities and shareholders' equity both increase by $2 million. c. Assets decrease by $2 million, liabilities decrease by $2 million, and shareholders' equity is unchanged. d. Assets are unchanged, liabilities increase by $2 million, and contributed capital decreases by $2 million.arrow_forwardPlease help me this questionarrow_forward
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