Question
ITEM 1 ITEM 2 TOTAL SELLING PRICE UNIT $ 100 $ 400 $ 500 VARIABLE COST PER UNIT $ 40 $ 240 $ 280 EXPECTED
| ITEM 1 | ITEM 2 | TOTAL | |
| SELLING PRICE UNIT | $ 100 | $ 400 | $ 500 |
| VARIABLE COST PER UNIT | $ 40 | $ 240 | $ 280 |
| EXPECTED UNIT SALES | 21,000 | 9,000 | 30,000 |
| SALES MIX | 70% | 30% | 100% |
| FIXED COSTS | $ 1,260,000 | $ 540,000 | $ 1,800,000 |
A) Calculate the contribution margin ratio
B) Find the break-even point in sales dollars
C) Find the amount of sales dollars required to earn a monthly profit of $540,000
D) Assume the contribution margin income statement prepapred in requirement A is the company's base case. What is the margin of safety in sales dollars?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
Certificate Of Cloud Auditing Knowledge Study Guide
Authors: Isaca
1st Edition
1604208619, 978-1604208610
