Answered: Calculate the breakeven point and…

Calculate the breakeven point and contribution margin. Breakeven point 38,550 units Fixed cost $ 77,100 Contribution margin Selling price per unit $ 5 Variable cost per unit $ 3

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

Calculate the breakeven point and contribution margin.
Breakeven point
38,550 units
Fixed cost
$ 77,100
Contribution
margin
Selling price per
unit
$
5
Variable cost per
unit
3

Expert Solution

Step 1

At Break-even point, the amount of sales are equal to the total expenses generating the net income of zero.

Contribution margin is the difference of sales and the variable cost.

At Break-even point, contribution margin is equal to the fixed cost.

Step by step

Solved in 2 steps

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