Answers
Please refer the solution below: |
Statement showing computation: |
1) calculation of contribution margin ratio: |
Selling price per unit= 750000/30000= $25 |
Variable cost per unit= 450000/30000= $15 |
Contribution margin pe unit= selling price-variable cost per unit= 25-15= $10 |
Contribution margin ratio= Contribution/selling price*100 |
= 10/25*100=40% |
Contribution margin ratio is 40% |
2) Calculation of break even point in units : |
break even point= Fixed cost/ contribution margin per unit |
=210000/10=21000 units |
Break even point in units= 21000 units |
3) Calculation of break even point in dollars: |
Break even point in dollars= Fixed cost/contribution margin ratio |
Break even point in dollars=210000/0.40= $525000 |
Break even in sales dollar= $525000 |
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