**SBD Phone Company: Analyzing Financial Metrics for Waterproof Phone Case**SBD Phone Company sells its waterproof phone case for $98 per unit. Fixed costs total $182,000, and variable costs are $44 per unit.### (1) Determine the Contribution Margin Ratio**Contribution Margin Calculation per Unit:**- Selling Price per Unit: $98- Variable Cost per Unit: $44- Contribution Margin per Unit: $98 - $44 = $54**Contribution Margin Ratio:**\[ \text{Contribution Margin Ratio} = \frac{\text{Contribution Margin per Unit}}{\text{Selling Price per Unit}} \]\[ \text{Contribution Margin Ratio} = \frac{54}{98} \approx 0.551 \text{ or } 55.1\% \]### (2) Determine the Break-Even Point in Dollars**Break-Even Point Calculation:**\[ \text{Break-Even Point in Dollars} = \frac{\text{Fixed Costs}}{\text{Contribution Margin Ratio}} \]\[ \text{Break-Even Point in Dollars} = \frac{182,000}{0.551} \approx 330,309.44 \]Thus, the SBD Phone Company needs to achieve approximately $330,309.44 in sales to break even.

Break-even analysis is a technique widely used by the production department. It helps to determine…

SBD Phone Company sells its waterproof phone case for $98 per unit. Fixed costs total $182,000, and variable costs are $44 per unit. (1) Determine the contribution margin ratio. per unit Contribution margin Contribution Margin Ratio Choose Numerator: Choose Denominator: Contribution Margin Ratio Contribution margin ratio %3D (2) Determine the break-even point in dollars. Choose Numerator: Choose Denominator: Break-Even Point in Dollars %3D Break-even point in dollars %3D

SBD Phone Company sells its waterproof phone case for $98 per unit. Fixed costs total $182,000, and variable costs are $44 per unit. (1) Determine the contribution margin ratio. per unit Contribution margin Contribution Margin Ratio Choose Numerator: Choose Denominator: Contribution Margin Ratio Contribution margin ratio %3D (2) Determine the break-even point in dollars. Choose Numerator: Choose Denominator: Break-Even Point in Dollars %3D Break-even point in dollars %3D

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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