I am in ACCT 201 managerial accounting and I'm having the worst time with formulas.  In this question, ABC Company is the exclusive distributor for an automotive product that sells for $58 per unit and has a CM ratio of 30%.  The fixed expenses are 435,000 per year.  The company plans to sell 30,000 units this year. What is the formula for Variable Expense per unit?

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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I am in ACCT 201 managerial accounting and I'm having the worst time with formulas.  In this question, ABC Company is the exclusive distributor for an automotive product that sells for $58 per unit and has a CM ratio of 30%.  The fixed expenses are 435,000 per year.  The company plans to sell 30,000 units this year.

What is the formula for Variable Expense per unit?

 

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Break-even analysis is a technique used widely by production management. It helps to determine the units to be sold to recover the total cost. It also helps to set the price of the product. Break-even analysis includes contribution margin, break-even, profit volume ratio, etc.

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