The budgets of four companies yield the following information:

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Requirements

1.

Fill in the blanks for each company.

2.

Compute break-even, in sales dollars, for each company. Which company has the lowest break-even point in sales dollars? What causes the low break-even point?

Requirement 1. Fill in the blanks for each company. (Round the contribution margin per unit and ratio calculations to two decimal places.)

Q

Target sales . . . . . . . . . . . . . . . . . .

$720,000

Variable expenses . . . . . . . . . . . . .

216,000

Fixed expenses . . . . . . . . . . . . . . .

504000

Operating income (loss) . . . . . . . .

$154,000

Units sold . . . . . . . . . . . . . . . . . . . .

Contribution margin per unit . . . .

$6.00

Contribution margin ratio . . . . . . .

R

$400,000

244000

156,000

125,000

0.65

S

$190,000

100000

90,000

12,000

$9.50

T

270,000

$140,000

15,750

$40.00

Requirement 2. Compute break-even, in sales dollars, for each company.

Which company has the lowest break-even point in sales dollars? What causes the low break-even point?

Q Company

R Company

S Company

T Company

has the lowest break-even point, primarily due to

its high fixed costs

its low fixed costs

its high sales price

.

Enter any number in the edit fields and then continue to the next question.