The following information relates to the only product sold by Harper Company Sales price per unit $ 45 Variable cost per unit 27 Fixed costs per year 300,000 a Compute the contribution margin ratio and the dollar sales volume required to break even b Assuming that the company sells 20,000 units dur...

a Contribution Margin Ratio Unit Sales Price Variable Costs ...

The following information relates to the only product sold by Harper Company. Sales price per unit .

Question:

The following information relates to the only product sold by Harper Company.
Sales price per unit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 45
Variable cost per unit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Fixed costs per year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 300,000
a. Compute the ratio and the dollar sales volume required to break even.
b. Assuming that the company sells 20,000 units during the current year, compute the margin of safety (in dollars).
Contribution Margin
Contribution margin is an important element of cost volume profit analysis that managers carry out to assess the maximum number of units that are required to be at the breakeven point. Contribution margin is the profit before fixed cost and taxes...