Answer:
Hopi Corporation Total fixed expenses next year= $225,000
Step-by-step explanation:
Given,
Contribution margin ratio = 0.75
Current sales = $400,000
Margin of Safety = $100,000
Breakeven sales can be calculated as,
Breakeven sales = Current Sales - Margin of safety
= $400,000 - $100,000
= $300,000
Fixed Expenses can be calculated as,
Fixed Expenses = Breakeven Sales × Contribution margin ratio
= $300,000 × 0.75
= $225,000
Answer: Expected total fixed expenses for Hopi next year is $225,000
