Breakeven sales in dollars for the month of december

Question

Task: Budget Project Questions

		Plan		Actual		Actual
Sales		1000000	1	1200000	1	800000	1
Variable Costs
Cost of Sales		600000	0.60	720000	0.60	480000	0.60
Commissions		50000	0.05	60000	0.05	40000	0.05
Delivery		10000	0.01	12000	0.01	8000	0.01
Bonus		50000	0.05	60000	0.05	40000	0.05
Total		710000	0.71	852000	0.71	568000	0.71
Contribution Margin		290000	0.29	348000	0.29	232000	0.29
Fixed Costs
Salaries-Management		20000	0.02	20000	0.017	20000	0.025
Salaries-Staff		6667	0.007	6667	0.006	6667	0.008
Advertising		40000	0.04	40000	0.033	40000	0.050
Rent		5000	0.005	5000	0.004	5000	0.006
Total		71667	0.07	71667	0.06	71667	0.09
Net Income		218333	0.22	276333	0.23	160333	0.20

Question 1. What are breakeven sales in dollars for the month of December?

Question 2. What is the margin of safety in dollars?

Question 3. What effect would a 3 percent decrease in variable cost have on planned contribution margin?

Question 4. What effect would a 3 percent increase in selling price have on planned contribution margin?

Question 5. What if any changes would you institute and why if you would, why not if you wouldn’t?