Business, 08.04.2021 19:00 Kathryn014

Contribution Margin Concepts DiPinto Electric Guitars & Basses sells musical instruments in Philadelphia. Assume the following information comes from the company's prior year records. Fixed Variable Total
Sales $800,000
Costs
Goods sold $346,000
Labor $180,000 40,000
Supplies 10,000 4,000
Utilities 9,000 5,000
Rent 48,000 -
Advertising 10,000 -
Miscellaneous 10,000 5,000
Total costs $267,000 $400,000 (667,000)
Net income $133,000

Required
a. Determine the annual break-even dollar sales volume.
b. Determine the current margin of safety in dollars.
c. What is the annual break-even dollar sales volume if management makes a decision that increases fixed costs by $50,000?

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