What is the contribution margin ratio? b. What is the break-even point in dollars? c. What is the margin of safety in dollars and as a ratio? d. If the company wishes to increase its total dollar contribution margin by 30% in 2020, by how much will it need to increase its sales if all other factors remain constant?
What is the contribution margin ratio? b. What is the break-even point in dollars? c. What is the margin of safety in dollars and as a ratio? d. If the company wishes to increase its total dollar contribution margin by 30% in 2020, by how much will it need to increase its sales if all other factors remain constant?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Felde Bucket Co., a manufacturer of rain barrels, had the following data for 2019:
Sales 2,500 units
Sales price $40 per unit
Variable costs $24 per unit
Fixed costs $19,500
Instructions
a. What is the contribution margin ratio?
b. What is the break-even point in dollars?
c. What is the margin of safety in dollars and as a ratio?
d. If the company wishes to increase its total dollar contribution margin by 30% in 2020, by how much
will it need to increase its sales if all other factors remain constant?
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