Last month, Laredo Company sold 450 units for $25 each During the month, fixed costs were $2,520 and variable costs were $9 per unit Required 1 Determine the unit contribution margin and contribution margin ratio 2 Calculate the break even point in units and sales dollars 3 Compute Laredos margin o...

Req 1 Unit contribution margin Sales price Variable cost per unit ...

Last month, Laredo Company sold 450 units for $25 each. During the month, fixed costs were $2,520

Question:

Last month, Laredo Company sold 450 units for $25 each. During the month, fixed costs were $2,520 and variable costs were $9 per unit.

Required:
1. Determine the unit and ratio.
2. Calculate the break-even point in units and sales dollars.
3. Compute Laredo’s margin of safety in units and as a percentage of sales.

Contribution Margin
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...