What is the companys break-even point in dollars

Reference no: EM133629116

Assignment: Accounting

Question I. Calculate the per-unit contribution margin of a product that has a sale price of $200 if the variable costs per unit are $65.

Question II. A product has a sales price of $150 and a per-unit contribution margin of $50. What is the contribution margin ratio?

Question III. Maple Enterprises sells a single product with a selling price of $75 and variable costs per unit of $30. The company's monthly fixed expenses are $22,500.

1. What is the company's break-even point in units?
2. What is the company's break-even point in dollars?
3. Construct a contribution margin income statement for the month of September when they will sell 900 units.
4. How many units will Maple need to sell in order to reach a target profit of $45,000?
5. What dollar sales will Maple need in order to reach a target profit of $45,000?
6. Construct a contribution margin income statement for Maple that reflects $150,000 in sales volume.

Question IV. Company A has current sales of $10,000,000 and a 45% contribution margin. Its fixed costs are $3,000,000. Company B is a service firm with current service revenue of $5,000,000 and a 20% contribution margin. Company B's fixed costs are $500,000. Compute the degree of operating leverage for both companies. Which company will benefit most from a 25% increase in sales? Explain why.

Question V. Marshall & Company produces a single product and recently calculated their break-even point as shown.

                                       Current
Units sold                                 400
Sales price per unit                    $ 550
Variable cost per unit                 $ 375
Contribution margin per unit       $ 175
Fixed costs                               $ 3,500
Break-even (in units)                 20
Contribution margin ratio           31.82%
Break-even (in dollars)               $11,000

What would Marshall's target margin of safety be in units and dollars if they required a $14,000 margin of safety?

Reference no: EM133629116

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