Profitability Analysis
Assume a local Cost Cutters provides cuts, perms, and hairstyling services. Annual fixed costs are $105,000, and variable costs are 40 percent of sales revenue. Last year's revenues totaled $225,000.
(a) Determine its break-even point in sales dollars.
(b) Determine last year's margin of safety in sales dollars.
(c) Determine the sales volume required for an annual profit of $80,000.
Round your answer to the nearest dollar.