Question
Massey Company reported the following data regarding the product it sells: Sales price $ 25 Contribution margin ratio 40 % Fixed costs $ 810,000 Required
Massey Company reported the following data regarding the product it sells:
| Sales price | $ | 25 | |
| Contribution margin ratio | 40 | % | |
| Fixed costs | $ | 810,000 | |
Required
Use the contribution margin ratio approach and consider each requirement separately.
-
What is the break-even point in dollars? In units?
-
To obtain a profit of $270,000, what must the sales be in dollars? In units?
-
If the sales price increases to $30 and variable costs do not change, what is the new break-even point in dollars? In units?
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
Compliance Audits And Plans For Healthcare
Authors: Cherilyn G. Murer, Michael A. Murer, Lyndean Lenhoff Brick, Healthcare Financial Management Association (U. S.)
1st Edition
0070444625, 978-0070444621
