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What is the contribution margin ratio

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Reference no: EM132811703

Question - Yummy Thai Takeaway Shop delivers takeaway food to the residential apartments and houses near the central business district of Newtown.

The takeaway shop's monthly fixed expenses are $5 000. The selling price of a takeaway box is $12, and it costs the shop $7 to make and deliver each takeaway box.

In the following requirements, taxes are ignored.

Required -

(a) Calculate the takeaway shop's yearly break-even point in units.

(b) What is the contribution margin ratio?

(c) Compute the shop's monthly break-even sales revenue?

(d) How many takeaway boxes must the shop sell monthly to earn a target profit of $70 000 for that month?

Reference no: EM132811703

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