Sunn Company manufactures a single product that sells for $225 per unit and whose variable costs are $180 per unit. The company's annual fixed costs are $643,500. (a) Compute the company's contribution margin per unit. Selling price Less: Variable cost $ 225 per unit +180 per unit Contribution margin (b) Compute the company's contribution margin ratio. Numerator: 1 Contribution margin per unit (c) Compute the company's break-even point in units. Numerator: Fixed costs Denominator: = Contribution Margin Ratio = Contribution margin ratio 0 Denominator: = = Break-Even Units Break-even units 0 (d) Compute the company's break-even point in dollars of sales. Numerator: Denominator: = Break-Even Dollars = Break-even dollars 0
Sunn Company manufactures a single product that sells for $225 per unit and whose variable costs are $180 per unit. The company's annual fixed costs are $643,500. (a) Compute the company's contribution margin per unit. Selling price Less: Variable cost $ 225 per unit +180 per unit Contribution margin (b) Compute the company's contribution margin ratio. Numerator: 1 Contribution margin per unit (c) Compute the company's break-even point in units. Numerator: Fixed costs Denominator: = Contribution Margin Ratio = Contribution margin ratio 0 Denominator: = = Break-Even Units Break-even units 0 (d) Compute the company's break-even point in dollars of sales. Numerator: Denominator: = Break-Even Dollars = Break-even dollars 0
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Sunn Company manufactures a single product that sells for $225 per unit and whose variable costs are $180 per unit. The company's
annual fixed costs are $643,500.
(a) Compute the company's contribution margin per unit.
Selling price
Less:
Variable cost
$
225 per unit
+180 per unit
Contribution margin
(b) Compute the company's contribution margin ratio.
Numerator:
1
Contribution margin per unit
(c) Compute the company's break-even point in units.
Numerator:
Fixed costs
Denominator:
=
Contribution Margin Ratio
=
Contribution margin ratio
0
Denominator:
=
=
Break-Even Units
Break-even units
0
(d) Compute the company's break-even point in dollars of sales.
Numerator:
Denominator:
=
Break-Even Dollars
=
Break-even dollars
0
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