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Suppose O'Reilly Corp.'s breakeven point is revenues of $1,500,000. Fixed costs are $660,000. Required 1. Compute the contribution margin percentage. 2. Compute the selling price
Suppose O'Reilly Corp.'s breakeven point is revenues of $1,500,000. Fixed costs are $660,000.
Required
1. Compute the contribution margin percentage.
2. Compute the selling price if variable costs are $14 per unit.
3. Suppose 85,000 units are sold. Compute the margin of safety in units and dollars.
4. What does this tell you about the risk of O'Reilly making a loss? What are the most likely reasons for this risk to increase?
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