[Question 10]

Whittier Company plans to sell 1,000 mowers at $400 each in the coming year. Total variable

expense per unit is $325. Total fixed expense is $45,000.

Required:

a. Calculate the contribution margin ratio. (4 marks)

b. Calculate the sales revenue and units that Whittier Company must make to break even.

(4 marks)

c. Check your answer by preparing a contribution margin income statement based on the

break-even point in sales dollars. (5 marks)

d. Prepare a break even chart to illustrate the scenario described for Whittier Company.

(12 marks)