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Miller Corporation produces a single product, with both fixed and variable costs. The company is expecting that the selling price will increase next year, but
Miller Corporation produces a single product, with both fixed and variable costs. The company is expecting that the selling price will increase next year, but that it can keep variable costs per unit and fixed costs at the current levels. What effect will the selling.price increase have on the contribution margin ratio (contribution margin divided by revenue) for next year, and on the break-even point in number of units for next year, respectively? Contribution margin will remain the same, break-even point units will remain the same. Contribution margin ratio will increase, break-even point units will increase. Contribution margin ratio will decrease, break-even point units will decrease. Contribution margin ratio will decrease, break-even point units will increase, Contribution margin ratio will increase, break-even point units will decrease. Blue Corporation produces and sells a single product for a price of $50 per unit. The contribution margin ratio (contribution margin/revenue) is 40%, and the fixed cost is $20,000. If the company wants to make a net operating profit of $40,000, what number of units must be sold? 4,000 units 800 units 2,000 units 3,000 units 1,200 units
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