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Capstone, INC, produces memory enhancement kits for tax machines. Sales have been very erratic, with some months showing a profit and some months showing a
Capstone, INC, produces memory enhancement kits for tax machines. Sales have been very erratic, with some months showing a profit and some months showing a loss. The companys contribution format income statement for the most recent month is given below:
Sales (13,500 units X at $20 per unit . $270,000
Variables expenses $189,000
Contribution margin $81,000
Fixed expenses . $90,000
Net operating loss ($9,000)
Required:
1. Compute the companys CM ratio and its break-even point in both units and dollars.
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