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In 2018, Samantha's Bath and Body Shop had variable costs of $27,000, fixed costs of $18,000,...

In 2018, Samantha's Bath and Body Shop had variable costs of $27,000, fixed costs of $18,000, and a net loss of $4,500. ​

Samantha's 2018 break-even sales volume was.......

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Answer #1

Compute break even sales volume

contribution margin statement

Sales $40500
(-) variable expenses $27000
Contribution margin $13500
(-) fixed expenses ($18000)
Net operating income/loss ($4500)

Contribution margin = fixed expenses - net loss

= $18000 - $4500 =$13500

Sales = variable expenses + contribution margin

=$27000+13500 = $40500

Contribution margin ratio = contribution margin/sales×100

= $13500/$40500×100 = 33.33%

Break even sales = fixed expenses/contribution margin ratio

= $18000/33.33%

= $54005

Break even sales = $54005

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