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EXERCISE 8-2 Calculating Break-Even Sales [LO1- CC1; LO2- CC6] ...

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Accounting

EXERCISE 8-2
Calculating Break-Even Sales [LO1- CC1; LO2- CC6]
Kirk Company's contribution margin ratio on the sale of its most popular product is 35%. The product is priced at $75, and annual fixed
expenses are $750,000. Management is evaluating two options: (1) lowering variable costs by 10% and (2) reducing fixed expenses by 10%.
Required:
Calculate the current level of break-even sales in dollars, as well as the break-even sales for the two options.
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