The following information is taken from the 2017 records of Hendrix's Guitar Center
Fixed Variable  Total  

Sales  $2,250,000  
Costs  
Goods sold  1,012,500  
Labor  $480,000  180,000  
Supplies  6,000  15,000  
Utilities  36,000  39,000  
Rent  72,000  0  
Advertising  18,000  73,500  
Miscellaneous  18,000

30,000


Total costs  $630,000

$1,350,000

(1,980,000)


Net income  $ 270,000 
(a.) Determine the annual breakeven dollar sales volume.
Contribution margin ratio: Answer
Annual breakeven dollar sales volumes: $Answer
(b.) Determine the current margin of safety in
dollars.
$Answer
(c.) Prepare a costvolumeprofit graph for the guitar shop. Label both axes in dollars with maximum values of $1,000,000. Draw a vertical line on the graph for the current ($750,000) sales level, and label total variable costs, total fixed costs, and total profits at $75,000 sales.
(d.) What is the annual breakeven dollar sales volume if management makes a decision that increases fixed costs by $100,000?
The following information is taken from the 2017 records of Hendrix's Guitar Center Fixed Variable Total...
Contribution Margin Concepts The following information is taken from the 2017 records of Hendrix's Guitar Center. Required (a.) Determine the annual breakeven dollar sales volume(b.) Determine the current margin of safety in dollars.(c.) Prepare a costvolumeprofit graph for the guitar shop. Label both axes in dollars with maximum values of $ 1,000,000. Draw a vertical line on the graph for the current $750,000 sales level, and label total variable costs, total fixed costs, and total profits at $ 75,000 sales.(d.) What is the...
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