Information for a company's two products follows. Total fixed costs are $563,200, and target income is $140,800, Contribution margin per unit Percent of company sales 1. Compute the break-even point in units. Numerator Product 1 $ 200 60% Product 2 $ 140 40% Denominator 2. Determine the number of units of each product that will be sold at the break-even point. Product 1 Product 2 3. Compute the number of each product sold to reach target income of $140,800. Product 1 unit sales Product 2 unit sales Break Even Units = Break even units

Information for a company's two products follows. Total fixed costs are $563,200, and target income is $140,800, Contribution margin per unit Percent of company sales 1. Compute the break-even point in units. Numerator Product 1 $ 200 60% Product 2 $ 140 40% Denominator 2. Determine the number of units of each product that will be sold at the break-even point. Product 1 Product 2 3. Compute the number of each product sold to reach target income of $140,800. Product 1 unit sales Product 2 unit sales Break Even Units = Break even units

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter7: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 47E: Klamath Company produces a single product. The projected income statement for the coming year is as...

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Klamath Company produces a single product. The projected income statement for the coming year is as follows: Required: 1. Compute the unit contribution margin and the units that must be sold to break even. 2. Suppose 10,000 units are sold above break-even. What is the operating income? 3. Compute the contribution margin ratio. Use the contribution margin ratio to compute the break-even point in sales revenue. (Note: Round the contribution margin ratio to four decimal places, and round the sales revenue to the nearest dollar.) Suppose that revenues are 200,000 more than expected for the coming year. What would the total operating income be?
A product has a sales price of $250 and a per-unit contribution margin of $75. What is the contribution margin ratio?
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