Question 5:(total 8 marks) XEMACompany estimates that variable costs will be 60% of sales and fixed...

Question 5:(total 8 marks)

XEMACompany estimates that variable costs will be 60% of sales and fixed costs will total $900,000. The selling price of the product is $5, and 500,000 units will be sold.

Instructions: Using the contribution margin:

(a) Compute the break-even point in units and dollars. (3marks)

(c) Compute the margin of safety in dollars and as a ratio.

(d) Compute net income.

Expert Solution

ekkarill92 answered 1 year ago

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