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Question 2 - (6 Points) Compute break-even point in dollars, contribution margin ratio, target net income sales CUBS Inc. produces widgets. The widgets are sold
Question 2 - (6 Points) Compute break-even point in dollars, contribution margin ratio, target net income sales CUBS Inc. produces widgets. The widgets are sold for $10.00 per unit to wholesalers. Unit variable cost are 70% of Sales. For the year 2019, management estimates the following revenues and costs. $ Sales Manufacturing overhead -fixed Selling expenses - fixed SGA expenses - fixed 7,500,000 1,160,000 300,000 700,000 Bonuses Rent Meals & Entertainment Travel Expenses 325,000 250,000 175,000 150,000 Instructions: (a) Compute the contribution margin ratio. (Round to the nearest full percent.) (b) Compute the break-even point in dollars. (c) Determine the sales dollars required to earn net income of $675,000 (a) Contribution margin ratio Unit contribution margin Unit selling price Contribution margin ratio (b) Break-even point in dollars Fixed costs Contribution margin ratio Break-even point in dollars (c) Sales dollars required to earn target net income Fixed costs Target income Total fixed cost + target income Contribution margin ratio Sales dollars required
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