Montreal Seating Co., a manufacturer of chairs, had the following data for 2012: Sales __________________ 2,800 units

Question:

Montreal Seating Co., a manufacturer of chairs, had the following data for 2012:
Sales __________________ 2,800 units
Sales price _____________ $50 per unit
Variable costs __________$30 per unit
Fixed costs _______________$30,000
Instructions
(a) Calculate the ratio.
(b) Calculate the break-even point in dollars.
(c) Calculate the margin of safety in dollars.
(d) The company wishes to increase its total dollar by 60% in 2013. Determine by how much it will need to increase its sales if all other factors remain constant?
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...