Assume a local cost cutters provides cuts perms and

Question

Question - 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 $205,000.

(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 $70,000.