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Sagot :
Answer:
Sales must have amounted to $760,000
Explanation:
We need to calculate from the bottom to the top of the Contribution Income Statement
Step 1
Break Even Point (Dollars) = Fixed Cost ÷ Contribution Margin
Where,
Contribution Margin = 100 % - 70%
= 30 %
Therefore,
Step 2
Fixed Costs = Break Even Point (Dollars) × Contribution Margin
= $890,000 × 30 %
= $267,000
Step 3
We know that,
Net Income/ loss = Contribution - Fixed Costs
Therefore
Contribution = Net Income/ loss + Fixed Costs
= - $39,000 + $267,000
= $228,000
Step 4
Finally, we need to calculate the amount in sales
Sales = 100/30 × $228,000
= $760,000
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