The Smith Company's fixed costs for the year are estimated at $1,000,000. The variable costs are usually about 70 Percent of sales. Sales for the coming year are expected to reach $3,800,000.
1.What is the Break-even Point?
2.Expected profit at a sales level of $3,800,000?
3. If sales are only $2,000,000 should the company shut down? why?