Answer:
$15000.
Explanation:
Given: Sales $90,000
Less Variable Exp (54,000)
Contribution margin 36,000
Less Fixed Exp (24,000)
Operating Profit $12,000
As sales decreases by 10%.
∴ Sales= [tex]Current\ sales- (current\ sales \times 10%)[/tex]
Sales= [tex]\$ 90000- (\$ 90000 \times \frac{10}{100} )[/tex]
Solving and opening the parenthesis.
Sales= [tex]\$90000- \$ 9000= \$ 81000[/tex]
Sales= $81000.
Now, computing to get fixed expense at which operating profit will remain same.
Contribution margin= sales- variable expense
⇒ Contribution margin= [tex]\$ 81000-\$ 54000= \$ 27000[/tex]
Fixed expense= Contribution margin - operating profit
[tex]Fixed\ expense= \$ 27000-\$ 12000= \$ 15000[/tex]
∴ Fixed expense will $ 15000 at which operating profit will remain same.
