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[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
[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)
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