Reference no: EM133076852
Question - Barbara Company has the following information for a project in which they expect to sell 20,000 units:
Sales price $200 per unit
Direct Material $50 per unit
Direct Labour $30 per unit
Variable Overhead $25 per unit
Sales Commission 7.5% of sales
Fixed Overhead $1,000,000
Calculate the following. You must use formulas and show all your work to receive marks. Label your answers clearly. Requirements are worth 3 marks each for a total of 15 marks
1. Calculate the contribution margin ratio.
2. Calculate break-even point sales of units.
3. Calculate break-even point in dollars.
4. Calculate the margin of safety in units.
5. Calculate the margin of safety in dollars.