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Computing contribution margin, breakeven point, and units to achieve operating income
Consider the following facts:
A
B
C
Number of units
1,300
3,600
7,500
Sale price per unit
$ 100
$ 40
$ 125
Variable costs per unit
40
10
100
Total fixed costs
72,000
60,000
40,000
Target operating income
180,000
75,000
100,000
Calculate:
Contribution margin per unit
Contribution margin ratio
Breakeven points in units
Breakeven point in sales dollars
Units to achieve target operating income
Requirement
1. Compute the missing information.
Make a flexible budget for following levels of production: 18,000 units, 20,000 units, and 22,000 units. Find out the flexible budget formula for the year ended December 31?
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