Based on the below examples (1&2), how can I figure out which contribution margin is needed to calculate the required Break-even? Between (Contribution Margin Per Unit) or (Contribution Margin Ratio). Example (1) (Why we didn't take CM/unit, but instead, CMR is calculated?) Northern Pacific Fixtures Corporation sells a single product for $28 per unit. If variable expenses are 65% of sales and fixed expenses total $9,800, the break-even point is? Example (2) (this one I know how to calculate). Mishoe Corporation has provided the following contribution format income statement. All questions concern situations that are within the relevant range. Sales (1,000 units)...................... $50,000 Variable expenses...................... 32,500 Contribution margin..................... 17,500 Fixed expenses.......................... 12,250 Net operating income.................. $5,250 The break-even point in unit sales is closest to?
Based on the below examples (1&2), how can I figure out which contribution margin is needed to calculate the required Break-even? Between (Contribution Margin Per Unit) or (Contribution Margin Ratio).
Example (1) (Why we didn't take CM/unit, but instead, CMR is calculated?)
Northern Pacific Fixtures Corporation sells a single product for $28 per unit. If variable expenses are 65% of sales and fixed expenses total $9,800, the break-even point is?
Example (2) (this one I know how to calculate).
Mishoe Corporation has provided the following contribution format income statement. All questions concern situations that are within the relevant range.
|
|
Sales (1,000 units)...................... |
$50,000 |
|
|
Variable expenses...................... |
32,500 |
|
|
Contribution margin..................... |
17,500 |
|
|
Fixed expenses.......................... |
12,250 |
|
|
Net operating income.................. |
$5,250 |
The break-even point in unit sales is closest to?
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