FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Klinken Corporation's contribution margin ratio on the sale of its most popular product is 50%. The product is priced at $83, annual
fixed expenses are $815,000. Management is evaluating two options: (1) lowering variable costs by 10% and (2) reducing fixed
expenses by 10%.
Required:
Calculate the current level of break-even sales in dollars, as well as the break-even sales for the two options. (Do not round
intermediate calculations. Round your answers to the nearest whole dollar amount.)
Break-even sales in dollars
Option 1 Break-even sales in dollars
Option 2 Break-even sales in dollars
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Transcribed Image Text:Klinken Corporation's contribution margin ratio on the sale of its most popular product is 50%. The product is priced at $83, annual fixed expenses are $815,000. Management is evaluating two options: (1) lowering variable costs by 10% and (2) reducing fixed expenses by 10%. Required: Calculate the current level of break-even sales in dollars, as well as the break-even sales for the two options. (Do not round intermediate calculations. Round your answers to the nearest whole dollar amount.) Break-even sales in dollars Option 1 Break-even sales in dollars Option 2 Break-even sales in dollars
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