Estimate the break-even sales revenue of Company A
A profit/volume (P/V) chart of two companies (A and B) for a period follows:
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Order Paper NowBy reference to the above chart, justify your conclusion to:
a. 1. Estimate the break-even sales revenue of Company A.
ii. Estimate the total fixed costs of Company A.
iii. State which company has the higher contribution/sales ratio.
Iv. Estimate the level of sales at which the profit of the two companies is the same.
b. Calculate the contribution/sales ratio of Company A and use this to confirm, by calculation, the break-even point identified in Question 4 (a)(i) above.
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