The management of Lambda Corporation has received the following forecast for the next year. Sales revenue $600,000 Fixed costs $275,000 Variable costs 270,000 Total costs 545,000 Net income $ 55,000 Capacity is a sales volume of $800,000. a. Compute i. the contribution margin ii.the contribution rate. b. Compute the break-even point i. in dollars; ii. as a percent of capacity. c. Determine the break-even volume in dollars if fixed costs are increased by $40,000, while variable costs are held to 40% of sales.
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