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Allison Parker sells homemade knit scarves for $20 each at local craft shows. Her contribution margin ratio is 62.5%. Currently, the craft show entrance fees
Allison Parker sells homemade knit scarves for $20 each at local craft shows. Her contribution margin ratio is 62.5%. Currently, the craft show entrance fees cost Allison $500 per year. The craft shows are raising their entrance fees by 25% next year. How many extra scarves will Allison have to sell next year just to pay for rising entrance fee costs? Begin by identifying the general formula to compute the breakeven sales in units. Fixed expenses + Operating income )1 Contribution margin per unit = Breakeven sales in units Allison will have to sell 50 extra scarves next year just to pay for rising entrance fee costs
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