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Van Nostrand Company makes neck ties that sell for $40 each. For the coming year, management expects fixed costs to be $480,000. Variable costs
Van Nostrand Company makes neck ties that sell for $40 each. For the coming year, management expects fixed costs to be $480,000. Variable costs are $30 per unit. Instructions (show all work) (a) Compute break-even sales in dollars using the mathematical equation. (b) Compute break-even in units using the contribution margin. (c) (d) Compute break-even sales in dollars using the contribution margin ratio. Compute margin of safety ratio assuming actual sales are $2,400,000. (e) Compute the sales in dollars required to earn net income of $120,000 using contribution margin ratio.
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