
Concept Introduction:
Contribution margin: Contribution margin is the difference between sales price and variable costs. It is calculated with the help of following formula:
Breakeven point: The Breakeven point is level of sales at which the net profit is zero. In other words, the breakeven point is the amount of sales at which there no loss and no profit. The formulas to calculate breakeven point are as follows:
Requirement-1:
To calculate: The breakeven units using the equation approach
Requirement-2:
To calculate: The Dollar sales to earn the desired income using the contribution margin approach
Requirement-3:
To Prepare: The Contribution Margin Income Statement for the year 2016
Requirement-4:
To calculate: The breakeven units and breakeven sales $ under the explanation plan and take decision for the expansion

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Chapter 21 Solutions
Horngren's Accounting, The Financial Chapters (11th Edition) - Standalone Book
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