(Answered) Question - profitability analysisassume a local cost

Accounting

Question - Profitability Analysis

Assume a local Cost Cutters provides cuts, perms, and hairstyling services. Annual fixed costs are $105,000, and variable costs are 40 percent of sales revenue. Last year's revenues totaled $205,000.

(a) Determine its break-even point in sales dollars.

(b) Determine last year's margin of safety in sales dollars.

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