Seton Company manufactures a single product that sells for $360 per unit and whose total variable costs
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Seton Company manufactures a single product that sells for $360 per unit and whose total variable costs are $270 per unit. The company’s annual fixed costs are $1,125,000.
(1) Use this information to compute the company’s
(a) Contribution margin,
(b) Contribution margin ratio,
(c) Break-even point in units, and
(d) Break-even point in dollars of sales.
(2) Draw a CVP chart for the company.
Contribution margin is an important element of cost volume profit analysis that managers carry out to assess the maximum number of units that are required to be at the breakeven point. Contribution margin is the profit before fixed cost and taxes...
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1 a Contribution margin per unit 360 270 90 per unit b Contribution margin ratio 90 ...View the full answer
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