Company M Had Fixed Costs of $262,500,variable Costs of $625,000,and

question 92

Essay

Company M had fixed costs of $262,500,variable costs of $625,000,and actual sales of $1,000,000.If the company has a break-even point at $700,000 in sales revenue,determine (a)the margin of safety expressed in dollars, (b)the margin of safety expressed as a percentage of sales, (c)the contribution margin ratio,and (d)the operating income.

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Definitions:

Sharing of Profits

An arrangement where profits earned from a business, investment, or venture are distributed among the stakeholders or partners according to predetermined criteria or an agreed formula.

Photoshoots

involve the process of taking professional photographs, usually of a person, group, or product, often conducted by a photographer in a studio or outdoor location.

Loan Repayment

The act of paying back money previously borrowed from a lender, typically including both the principal and interest.

Widow

A woman whose spouse has died and who has not remarried.