Calculate the dollar value of sales required for each store

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Problem

Rocky Volcano Chocolate operates two stores, one in Edmonton and another in St. John's. The following income statements were prepared for the most recent year: Edmonton St. John's Net sales $3,780,000 $960,000 Variable costs: Cost of goods sold 1,512,000 528,000 Sales commission 189,000 48,000 Utilities 17,200 15,300 Contribution margin $2,061,800 $368,700 Fixed costs: WWW.YORKVILLEU.CA Annual building lease Salaries 84,000 39,000 Allocated corporate overhead 380,000 180,000 Amortization of store equipment & leasehold improvements 750,000 250,000 Operating income (loss) 60,000 30,000 $787,800 $(130,300) The store equipment and leasehold improvements have no market value. The building leases can be cancelled without penalty. Get the instant assignment help.

Task

1) Calculate the dollar value of sales required for each store to break-even assuming that all of the fixed costs are to be covered?

2) Should management close the St. John's store?

Reference no: EM133901491

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