Klamath Company produces a single product. The projected income statement for the coming year is as follows: Sales (54,600 units @ $34) $1,856,400 Total variable cost 1,064,700 Contribution margin $ 791,700 Total fixed cost 801,850 Operating income $(10,150) Compute the contribution margin ratio. Use the contribution margin ratio to compute the break-even point in sales revenue. (Note: Round

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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Klamath Company produces a single product. The projected income statement for the coming year is as follows:

Sales (54,600 units @ $34) $1,856,400
Total variable cost 1,064,700
Contribution margin $ 791,700
Total fixed cost 801,850
Operating income $(10,150)

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 before converting to a percentage (for example, 0.80378 would be rounded to .8038, and entered as 80.38%), and round the sales revenue to the nearest dollar.)

Contribution margin ratio _______ %
Break-even sales revenue $_______

 

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