APPLY THE CONCEPTS: Calculate the break-even point in sales dollars for Harrison Products

Further analysis of Harrison Products's fixed costs revealed that the company actually faces annual fixed overhead costs of $9,800 and annual fixed selling and administrative costs of $4,200. Variable cost estimates are correct: direct materials cost, $4.00 per unit; direct labor costs, $5.00 per unit; and variable overhead costs, $1.00 per unit. At this time, the selling price of $20 will not change. Complete the following formulas for the revised fixed costs. Enter the ratio as a percentage.

Contribution Margin per Unit

=

$fill in the blank

-

$fill in the blank

=

$fill in the blank

Contribution Margin Ratio	=	$fill in the blank	=	fill in the blank
	$fill in the blank

Now complete the formulas for (1) the break-even point in sales dollars and (2) the units sold at the break-even point. To calculate this, divide the break-even point in sales dollars by the unit selling price.

Break-Even Point in Sales Dollars	=	$fill in the blank	=	$fill in the blank

Units Sold at Break-Even Point

=

fill in the blank

Assume that the number of units that Harrison sold exceeded the break-even point by one (1).

How much would operating income be? $fill in the blank ???

What would operating income be if the units sold exceeded the break-even point by five (5) units? $fill in the blank ???

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CengageNOWv2 | Online teaching and learning reso... Course Hero Review the statement format and the example from the sections above. What happens as the contribution margin approaches zero? APPLY THE CONCEPTS: Calculate the break-even point in sales dollars for Harrison Products Further analysis of Harrison Products's fixed costs revealed that the company actually faces annual fixed overhead costs of $9,800 and annual fixed selling and administrative costs of $4,200. Variable cost estimates are correct: direct materials cost, $4.00 per unit; direct labor costs, $5.00 per unit; and variable overhead costs, $1.00 per unit. At this time, the selling price of $20 will not change. Complete the following formulas for the revised fixed costs. Enter the ratio as a percentage. Contribution Margin per Unit = X X Contribution Margin Ratio % Now complete the formulas for (1) the break-even point in sales dollars and (2) the units sold at the break-even point. To calculate this, divide the break-even point in sales dollars by the unit selling price. Break-Even Point in Sales Dollars of Units Sold at Break-Even Point units Assume that the number of units that Harrison sold exceeded the break-even point by one (1). How much would operating income be? What would operating income be if the units sold exceeded the break-even point by five (5) units? $ Feedback Previous Next Check My Work All work saved. Email Instructor Save and Exit Submit Assignment for Grading MacBook Pro