Question
In: Accounting
If total fixed costs is $100,000, contribution per unit is $25 and the contribution margin ratio...
If total fixed costs is $100,000, contribution per unit is $25 and the contribution margin ratio is 40% and the company desired target profit of $25,000, what are the values of the followings (see page 97):
a) Break-Even-Point in unit = _________________?
b) Break-Even-Point in sales dollars________________________?
Solutions
Expert Solution
a) Break-even point in units = Fixed costs / Contribution margin per unit
= $100,000 / $25
= 4,000 units
b) Break-even point in sales dollars = Fixed costs / Contribution margin ratio
= $100,000 / 40%
= $250,000
ekkarill92 answered 2 years agoRelated Solutions
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