Blossom Bucket Co., a manufacturer of rain barrels, had the following data for 2019. Sales 2,430 units Sales price $40 per unit Variable costs $20 per unit Fixed costs $21,870 (a) What is the contribution margin ratio? Contribution margin ratio % (b) What is the break-even point in dollars? Break-even point $ (c) What is the margin of safety in dollars and as a ratio? Margin of safety $ Margin of safety ratio %
Blossom Bucket Co., a manufacturer of rain barrels, had the following data for 2019. Sales 2,430 units Sales price $40 per unit Variable costs $20 per unit Fixed costs $21,870 (a) What is the contribution margin ratio? Contribution margin ratio % (b) What is the break-even point in dollars? Break-even point $ (c) What is the margin of safety in dollars and as a ratio? Margin of safety $ Margin of safety ratio %
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Blossom Bucket Co., a manufacturer of rain barrels, had the following data for 2019.
| Sales | 2,430 | units | |
| Sales price | $40 | per unit | |
| Variable costs | $20 | per unit | |
| Fixed costs | $21,870 |
(a)
What is the contribution margin ratio?
| Contribution margin ratio |
|
% |
(b)
What is the break-even point in dollars?
| Break-even point |
$
|
(c)
What is the margin of safety in dollars and as a ratio?
| Margin of safety |
$
|
||
| Margin of safety ratio |
|
% |
(d)
If the company wishes to increase its total dollar contribution margin by 30% in 2020, by how much will it need to increase its sales if selling price per unit, variable price per unit and total fixed costs remain constant?
| Total increase in sales required: |
$
|
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