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Revenue 80,000 Variable Costs 45,000 Contribution Margin 35,000 Fixed Cost 15,000 Pre-tax Income 20,000 Income Taxes...

Revenue 80,000

Variable Costs 45,000

Contribution Margin 35,000

Fixed Cost 15,000

Pre-tax Income 20,000

Income Taxes (25%) 5,000

After-Tax Income 15,000

1. What is the Breakeven level of revenue?

2. What is the Margin of Safety of revenues?

3. If Fixed Cost were reduced by 10%, what would be the new breakeven revenue?

4. Given the current cost structure (ie. unchanged Fixed and Variable costs), how much revenue would be required to generate 50% more after-tax income?

5. Provide a revised Contribution Income Statement assuming this company achieves the higher level of after-tax revenue described in question 4.

Please show formulas. Thank you!

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