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A company has a margin of safety of 25%, a contribution marginratio of 30%, and sales of $1,000,000.

a) What is the break even point?

b) What was the operating income?

c) If neither the relationship between variable costs andsales nor the amount of fixed costs is expected to change in thenext year, how much additional operating income can be earnedby increasing sales by $110,000?

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Accounting Basics, Accounting

Category:- Accounting Basics
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