Clarissa sells her cupcakes for $2.50 each. Clarissa's variable costs per cupcake equal $0.50 and her monthly
Question:
Clarissa sells her cupcakes for $2.50 each. Clarissa's variable costs per cupcake equal $0.50 and her monthly fixed costs are $3,000.
Required:
a. What is Clarissa's contribution margin per cupcake?
b. How many cupcakes does Clarissa need to sell each month to break even?
c. How many cupcakes does Clarissa need to sell each month to earn a monthly profit of $2,000?
Contribution MarginContribution 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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Related Book For 
Managerial Accounting
ISBN: 978-1118385388
2nd edition
Authors: Ramji Balakrishnan, Konduru Sivaramakrishnan, Geoff B. Sprinkle
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