In the year 2008, Wiggins Processing Company had the following contribution income statement:
WIGGINS PROCESSING COMPANY
Contribution Income Statement
For the Year 2008
Sales $1,000,000
Variable costs
Cost of goods sold $440,000
Selling and administrative 200,000 (640,000)
Contribution margin 360,000
Fixed Costs
Factory overhead 190,000
Selling and administrative 80,000 (270,000)
Before-tax profit 90,000
Income taxes (39%) (35,100)
After-tax profit $54,900
HINT: Round the contribution margin ratio to two decimal places for your calculations below.
Determine the annual break-even point in sales dollars.
$Answer