Sabrina Inc. sells table for $110. The unit variable cost per table is $85. Fixed costs total $475,000.Required:aWhat is the contribution margin per table?b.What is the breakeven point in table?C.How many table must be sold to earn a pretax income of $450 000?d.What is the margin of safety, assuming 33 000 tires are sold?

Answered: Sabrina Inc., sells table for $110. The…

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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Sabrina Inc. sells table for $110. The unit variable cost per table is $85. Fixed costs total $475,000.
Required:
a
What is the contribution margin per table?
b.
What is the breakeven point in table?
C.
How many table must be sold to earn a pretax income of $450 000?
d.
What is the margin of safety, assuming 33 000 tires are sold?

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The Break-even point refers to the number of units that must be sold to earn the contribution margin that is only enough to cover the fixed costs and returns no profit or loss.

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