Blacklands, Inc. sells one product for $10. The firm has $60 of fixed costs. Blacklands has variable costs of $4 per unit. Required: Compute the breakeven point in sales revenue. Contribution margin (sales revenue variable costs): _____________ Contribution margin ratio (contribution margin/sales revenue): _____________ Breakeven point in sales revenue (fixed costs/contribution margin ratio: _____________ Oftentimes, it is easier to analyze the relationship between costs and profits on a sales unit basis, rather than a sales dollar basis. Assume Extreme Edges average product sells for $10. The variable cost and contribution margin associated with each units sales, therefore, are $8 and $2, respectively. This enables us to compute the breakeven point in sales units. Fixed costs / contribution margin per sale = breakeven point in units $220 / $2 = 110 units A contribution margin income statement verifies the above calculation: