Solve the following problem using the Contribution Margin Approach.
In the past year, the Greenwood Corporation had sales of $1,200,000, fixed costs of $400,000, and total variable costs of $600,000.
a) At what sales figure would Greenwood have broken even last year?
b) If sales increase by 15% in the year ahead (but all prices remain the same), how much (in $) will the net income increase?
c) If fixed costs are 10% lower in the year ahead (but sales and variable costs remain the same as last year), how much (in $) will the net income increase?
d) If variable costs are 10% higher in the year ahead (but sales and fixed costs remain the same as last year), how much (in $) will the net income decrease?

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The Answer of Solve the following problem using the Contribution Margin Approach.
In the past year, the Greenwood Corporation had sales of $1,200,000, fixed costs of $400,000, and total variable costs of $600,000.
a) At what sales figure would Greenwood have broken even last year?
b) If sales increase by 15% in the year ahead (but all prices remain the same), how much (in $) will the net income increase?
c) If fixed costs are 10% lower in the year ahead (but sales and variable costs remain the same as last year), how much (in $) will the net income increase?
d) If variable costs are 10% higher in the year ahead (but sales and fixed costs remain the same as last year), how much (in $) will the net income decrease?

Solve the Following Problem Using the Contribution Margin Approach