Answer:
1. $132,800
2. $531,200
3. $1,071,200
Explanation:
The break-even point is the level of sales at which the business incur no profit no loss.Fixed and variable costs are covered at this level of sales. Use following formula of break-even to calculate the fixed cost.
Break-even point = Fixed cost / Contribution margin ratio
$487,200 = Fixed cost / 25%
Fixed Cost = $487,200 x 25% = $121,800
1.
Revised Fixed cost = $121,800 + $11,000 = $132,800
2.
New Break-even point = $132,800 / 25% = $531,200
3.
Desired profit = $135,000
Desired revenue = ( Desired profit + Fixed cost ) /Contribution margin ratio = ( $135,000 + 132,800 ) / 25% = 267,800 / 25% = $1,071,200
