Contribution margin per unit and contribution margin ratio: Contribution margin is the difference between sales and the variable cost. Contribution margin ratio can be defined as the difference between sales and variable cost expressed as the percentage of sales.
The formula used to calculate contribution margin per unit is –
The formula used to calculate contribution margin ratio is –
Break-even point: The break-even point can be defined as the point where the total sales revenue is equal to the total costs involved. The break-even point is calculated as –
Requirement 1
To determine:
Contribution margin per package and Contribution margin ratio
Requirement 2:
To determine:
Break-even point in packages and dollars
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Horngren's Accounting, Student Value Edition (12th Edition)
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