Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Melony is a small business that sells athletic wear by the set and wants to make $600 in operating income for the month. Melony sells
Melony is a small business that sells athletic wear by the set and wants to make $600 in operating income for the month. Melony sells each set for $75 and has variable costs of $45 per set. Total fixed costs for the month is $300. Required: Calculate the following: . a) Contribution margin per unit sold (4 pts) b) Contribution margin ratio (4 pts) c) Breakeven point in units (4 pts) d) Units to be sold to earn the targeted operating income (4 pts) Assume Melony sells 25 sets in a given month, calculate her margin of safety and indicate if this is a risky business. (4 pts) (Total 20pts)
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