Question
Barbara company has the following information for a project in which they expect to sell 20,000 units: Sales price $200 per unit Direct Material $50
Barbara company has the following information for a project in which they expect to sell 20,000 units: Sales price $200 per unit Direct Material $50 per unit Direct Labour $30 per unit Variable Overhead $25 per unit Sales Commission 7.5% of sales Fixed Overhead $1,000,000 Calculate the following. You must use formulas and show all your work to receive marks. Label your answers clearly. Requirements are worth 3 marks each for a total of 15 marks 1. Calculate the contribution margin ratio 2. Calculate break-even point sales of units 3. Calculate break-even point in dollars 4. Calculate the margin of safety in units 5. Calculate the margin of safety in dollars
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