Please explain how to calculate Break-Even in units and Sales dollars using the Contribution Margin Approach....

Please explain how to calculate Break-Even in units and Sales dollars using the Contribution Margin Approach. Please explain the impact to Break-Even (increase,decrease,remain the same) under the following three different scenarios:

1. increase in fixed costs

2.increase in variable costs

3. increase in sales per unit

Expert Solution

ekkarill92 answered 2 years ago

Contribution Margin, Break-Even Units, Break-Even Sales, Margin of Safety, Degree of Operating Leverage Aldovar Company produces...

Contribution Margin, Break-Even Units, Break-Even Sales, Margin of Safety, Degree of Operating Leverage Aldovar Company produces a variety of chemicals. One division makes reagents for laboratories. The division's projected income statement for the coming year is: Sales (203,000 units @ $70) $14,210,000 Total variable cost 8,120,000 Contribution margin $6,090,000 Total fixed cost 4,945,500 Operating income $1,144,500 Required: 1. Compute the contribution margin per unit, and calculate the break-even point in units. Calculate the contribution margin ratio and use it to...

please define the following : contribution margin ratio. Variable expense ratio break-even sales in units. and...

please define the following : contribution margin ratio. Variable expense ratio break-even sales in units. and please support the answer with references (APA)

17. Using the following information, calculate the Break-Even in terms of dollars and number of units....

17. Using the following information, calculate the Break-Even in terms of dollars and number of units. (15 points) BELT MANUFACTURER Cost of leather per belt- $20 Cost of one belt buckle - $25 Cost to drill holes and attach buckle per belt - $5 Management payroll per month - $10,000 Operating expense per month - $20,000 Factory rent per month - $20,000 Price charged to retail store for 5 belts - $500 Cost per belt= $20, buckle /belt=$25, drill holes&buckle/belt=$5...

a. How are contribution margin and break even related? b. What happens to break even point...

a. How are contribution margin and break even related? b. What happens to break even point if variable cost per unit changes, if fixed cost changes? c. Explain the degree of operating leverage and how it is related to a companies profit risk.

Is the break-even volume, in units, a) the ratio of fixed cost per unit contribution margin...

Is the break-even volume, in units, a) the ratio of fixed cost per unit contribution margin or b) the ratio of selling price per unit contribution margin? If the prevailing market interest rate increases, does the purchase price of an annuity decrease or increase? When calculating the future value of an annuity due, is the end date at the beginning or end of the last payment interval?

Contribution Margin, Unit Amounts, Break-Even Units Information on four independent companies follows. Calculate the correct amount...

Contribution Margin, Unit Amounts, Break-Even Units Information on four independent companies follows. Calculate the correct amount for each answer blank. Unless otherwise instructed, round all total dollar figures (e.g., sales, total contribution margin) to the nearest dollar, breakeven or target units to the nearest unit, and unit costs and unit contribution margins to the nearest cent. Round ratios to four significant digits. Use the minus sign to indicate an operating loss. Laertes Ophelia Fortinbras Claudius Sales $15,000 $ $ $10,600...

What is (a) the contribution margin ratio and (b) the unit contribution margin? 2. Determine the break-even point in units. 3.What is the margin of safety?

Wyatt Inc. expects to maintain the same inventories at the end of the year as at the beginning of the year. The estimated fixed costs for the year are $288,000, and the estimated variable costs per unit are $14. It is expected that 60,000 units will be sold at a price of $20 per unit. Maximum sales within the relevant range are 70,000 units.1. What is (a) the contribution margin ratio and (b) the unit contribution margin?2. Determine the break-even...

Break-Even Units, Contribution Margin Ratio, Margin of Safety Khumbu Company's projected profit for the coming year...

Break-Even Units, Contribution Margin Ratio, Margin of Safety Khumbu Company's projected profit for the coming year is as follows: Total Per Unit Sales $3,054,500 $41.00 Total variable cost 1,466,160 19.68 Contribution margin $ 1,588,340 $ 21.32 Total fixed cost 1,378,190 Operating income $ 210,150 Required: 1. Compute the break-even point in units. If required, round your answer to nearest whole value. units 2. How many units must be sold to earn a profit of $240,000? If required, round your answer...

1. Given the following, depict fully and explain break-even in units, break-even in dollars, total revenue...

1. Given the following, depict fully and explain break-even in units, break-even in dollars, total revenue line, total cost line, fixed cost line, break-even point, etc. Fixed Cost: $120,000 Sales per Unit: $15.00 Variable cost per Unit: $3.00 Include a discussion regarding sensitivity analysis for an inelastic product.

1) "Define a Contribution Margin Approach Income Statement". (2) "Describe what is meant by Break-Even Point...

1) "Define a Contribution Margin Approach Income Statement". (2) "Describe what is meant by Break-Even Point ". (3) "Discuss what in what ways can the Break-Even Point (or Desired (Target) Profit Point) can be determined". (4) "Discuss the benefits and uses of Break-Even Analysis". (5) "Define Margin Of Safety and discuss its uses and benefits".

Question