Cutlass Company's projected profit for the coming year is as follows: Sales Total Per Unit $200,000 $20 Total variable cost 120,000 12 Contribution margin 80,000 8 Total fixed cost 64,000 Contribution margin $16,000 a. Compute the variable cost ratio. Compute the contribution margin ratio. b. Compute the break-even point in units. c. Compute the break-even point in sales dollars. d. How many units must be sold to earn a profit of $30,000?

Cutlass Company's projected profit for the coming year is as follows: Sales Total Per Unit $200,000 $20 Total variable cost 120,000 12 Contribution margin 80,000 8 Total fixed cost 64,000 Contribution margin $16,000 a. Compute the variable cost ratio. Compute the contribution margin ratio. b. Compute the break-even point in units. c. Compute the break-even point in sales dollars. d. How many units must be sold to earn a profit of $30,000?

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter16: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 36P: Faldo Company produces a single product. The projected income statement for the coming year, based...

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