Ans Doc105

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 Sales  Expenses
High Level Activity    55,20,000    48,57,900
Low Level Activity    50,00,000    44,30,000
Dfference      5,20,000      4,27,900
  1. Determine the break-even point in sales dollars
  2. What dollar sales volume is required to earn an after-tax of $480,000
  3. Assuming budgeted 2010 sales of $6,000,000, prepare a 2010 contribution income statement
  4. Discuss the reliability of the calculations in a,b, and c…including the limitations of the CVP (cost-volume-profit) model and how they affect the reliability of the model.