Laurel Mills, Inc., with fixed costs of $100,000, found that when sales jumped from $300,000 to...

Question:

Laurel Mills, Inc., with fixed costs of $100,000, found that when sales jumped from $300,000 to $400,000, the profit increased by $40,000. Both sales levels exceeded the break-even point.

Required:

The profit at a sales volume of $650,000.

PV ratio

Pv Ratio of the profit volume ratio is basically a measure that is computed by various organizations and companies in order to analyze the relationship between an increase/decrease in earnings of the firm as compared to an alteration in sales.

Answer and Explanation: 1

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The profit earned at $650,000 of sales is $160,000

Description Amount
Initial sales $300,000
Increased sales $400,000
Increase in sales (a) ...

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