Cost-Volume-Profit;volume Defined in Sales Dollars

question 69

Essay

Cost-volume-profit;volume defined in sales dollars.An excerpt from the income statement of the Dawson Company follows.Fixed costs in Year 1 are $660,000.
Dawson Company
Income Statement
Year ended December 31,year 1

Required:
a.What percentage of sales revenue is variable cost?
b.What is the break-even point in sales dollars for Dawson Company?
c.If sales revenue falls to $2,500,000,what will be the estimated amount of profit?
d.What amount of sales dollars produces a profit of $1,000,000?
(Dawson Company;cost-volume-profit;volume defined in sales dollars. )

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Definitions:

Operating Cash Flow

The cash generated from a company's regular business operations, indicating whether a company is able to generate sufficient positive cash flow to maintain and grow its operations.

Cash Flow

The aggregated sum of money being circulated in and out of a firm, importantly influencing its liquid financial resources.

Creditors

Entities or individuals that lend money or extend credit to others, expecting repayment in the future.

Stockholders

Individuals or entities that own shares of a corporation, giving them certain rights and potential for profit in the form of dividends and stock value appreciation.