The manager of dukey’s shoe station estimates operating costs for the year will include $360,000 in fixed costs.
required:
a. find the break-even point in sales dollars with a contribution margin ratio of 40 percent.
b. find the break-even point in sales dollars with a contribution margin ratio of 25 percent.
c. find the sales dollars required to generate a profit of $100,000 for the year assuming a contribution margin ratio of 40 percent.

(a) $900,000

(b) $1,440,000

(c) $1,150,000

Explanation:

a) Break-even point($):

= Fixed cost ÷ Contribution Margin ratio

= $360,000 ÷ 0.40

= $900,000

b)Break-even point($):

= Fixed cost ÷ Contribution Margin ratio

= $360,000 ÷ 0.25

= $1,440,000

C)Target sales ($):

= [Fixed cost + desired profit ] ÷ Contribution Margin ratio

= [$360,000 + $100,000] ÷ 0.40

= $ 1,150,000

the investment was $14,174.196

explanation:

a lump sum means that the father of the example made one deposit and leave it be.

we need to know the value of a capital that generated at 4.05% per year during 28 years the sum of $48,613.24

now clearing the formula to solve for capital we got:

and we reach the answer investment = $14,174.20