Chapter 21, Problem S21.9SE

To determine

Contribution Margin is nothing but the difference between Sale Price of a product and it’s Variable Cost. Contribution Margin of an entity represents the total earning of that entity to pay its fixed cost and to generate profit.

Break Even Sales refers to the amount of revenue at which an entity earns zero profit. This is the point below which the business will not continue. Break Even Sales is the nothing but the sum of all Fixed Cost and Variable Cost.

To Determine:

Contribution Margin, Units and Required Sales to break even, and Units to achieve Target Profit