Determine the sales volume required for an annual profit of $80,000.

Accounting
Tutor: None Selected Time limit: 1 Day

Assume a local Cost Cutters provides cuts, perms, and hairstyling services. Annual fixed costs are $120K, & variable costs are 40% of sales revenue. Last year's revenues totaled $250K.

BEP = $200,000

Last year's margin of safety in sales dollars = $50K

Jan 15th, 2015

BEP = $200,000 when fixed cost is absorbed by the contribution

120K/0.6 =200K

Profit = $80K

Sales Revenue = 200K+80K = 280K

Sales Volume must be $280,000

Jan 14th, 2015

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Jan 15th, 2015
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Jan 15th, 2015
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