Accounting Principles, Volume 2: Chapters 13 - 26
Accounting Principles, Volume 2: Chapters 13 - 26
12th Edition
ISBN: 9781118978764
Author: Jerry J. Weygandt, Donald E. Kieso, Paul D. Kimmel
Publisher: WILEY
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Chapter 22, Problem 22.9E

(a)

To determine

Variable Cost: The variable costs are the costs which vary with the level of output. The variable cost is directly proportional to the number of units. Thus, it increases or decreases with the level of units of sale.

Contribution Margin Ratio: The contribution margin ratio shows the difference between the sales value of a company and the variable costs of the company in percentage. The contribution margin ratio measures the percentage of the sales value which remains after the variable costs are expensed.

To determine: (a) The break-even point in (1) dollars and (2) number of fares.

(b) The contribution margin at the break-even point.

(b)

To determine

(b) The contribution margin at the break-even point.

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Chapter 22 Solutions

Accounting Principles, Volume 2: Chapters 13 - 26

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