a) Amanda Brothers Corporation (ABC Corp) sold 2,200 zippers in 2020 for $6 apiece. Amanda buys...

a) Amanda Brothers Corporation (ABC Corp) sold 2,200 zippers in 2020 for $6 apiece. Amanda buys the zippers for $2 each and it costs $1 to paint each zipper yellow and add a snazzy logo. Amanda paid $200 a month to rent a sales booth at his local outdoor market, along with a sales commission of $1 per zipper sold (his sister made all the sales on commission). Complete ABC Corp’s contribution income statement.

b) Amanda is wondering what his break-even point is. Calculate both the break-even revenue and sales volume.

c) Next year, Amanda is planning to sell 3,000 zippers. What will be his margin of safety?

d) Prepare a Cost-Volume-Profit graph for ABC Corp. Label the axes, lines, loss and profit areas, and break-even point clearly on your graph.

Expert Solution

ekkarill92 answered 2 years ago

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