Trendy Toes Co. produces sports socks. The company has fixed costs of $ 95,000 and variable costs

Question:

Trendy Toes Co. produces sports socks. The company has fixed costs of $ 95,000 and variable costs of $ 0.95 per package. Each package sells for $ 1.90.

Requirements

1. Compute the contribution margin per package and the contribution margin ratio. (Round your answers to two decimal places.)

2. Find the breakeven point in units and in dollars, using the contribution margin approach.

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...