NEXT Proolem 11- break-even point was $1.40 mllion. On sales of $1.30 willion, R

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NEXT Proolem 11- break-even point was $1.40 mllion. On sales of $1.30 willion, R he contrloution marin wes $20,000, and variable mandracturing overbead was $48,000. s income statement showed a gross profit of $208,000, direct materials cost of $410,000, and direct labor costs of alute lowing: (Round intermediate caloulations to 2 decimal places e.g2.25 and final answers to 0 decimal places, e.g. 1,225.) 1. Variable seing and admiistrative expenses. Posed manndactueg ovethad Fae veiling aundwntret expenses. t, , re om om e reased ts betsng, sales ould be ecreased by 20%, what is the maximum meased advertising cost the company can incur and stin report the same income as before the divertoing expenditure?

Explanation / Answer

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Sales $ 1,300,000 Less: Gross profit $   (208,000) Less: Direct material $   (410,000) Less: Direct labour $   (502,000) Less: Variable manufacturing overhead $     (48,000) Fixed manufacturing overhead $     132,000

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