1. When the income before taxes is zero, income taxes will also be zero
and net income will be zero. Therefore, the break-even calculations can
be based on the income before taxes.
a. Break-even point in dollar sales if the commission remains 15%.
Fixed costs $4,800,000 = =$12,000,000
CM ratio 0.40
b. Break-even point in dollar sales if the commission increases to 20%.
Fixed costs $4,800,000 = =$13,714,286
CM ratio 0.35
c. Break-even point in dollar sales if the company employs its own sales
force.
Fixed costs $7,125,000 = =$15,000,000
CM ratio 0.475
Bạn đang xem 1. - SOLUTIONS TO QUESTION MANAGERIAL ACCOUNTING CH06 COST VOLUME PROFIT RELATIONSHIPS