Question - Zia motors wants to increase profitability cost & estimates next year based on sales forecast of $3,000,000.
Direct materials is 800,000
Direct labor is 700,000
Factory overhead is 750,000
Selling expenses is 300,000
Other administrative expenses is 100,000
A-CM: $1,050,000
Factory overhead and Selling exp is 40% variable
Other admin expenses is 30% variable
How much revenue to break even?
Set to target $700,000 for next year, how much revenue must be generated to achieve this?