Homework Answers
Contribution margin=Sales-Variable cost
=(45-27)=$18 per unit
Contribution margin ratio=Contribution margin/Sales
=(18/45)=40%
Hence Breakeven=Fixed expenses/Contribution margin ratio
=228,000/0.4=$570000
Total sales=Breakeven sales+Margin of safety
Total sales=(20,000*45)=$900,000
Margin of safety=(900,000-570,000)=$330000
| Contribution margin ratio | 40% |
| Breakeven sales dollars | $570000 |
| Margin of safety | $330000 |
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The following information relates to the only product sold by Harper Company. $ 45 Sales price...
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The following information relates to the only product sold by Harper Company. Sales price per unit $ 45 Variable cost per unit 27 Fixed costs per year 262,000 a. Compute the contribution margin ratio and the dollar sales volume required to break even. b. Assuming that the company sells 20,000 units during the current year, compute the margin of safety (in dollars).
The following information relates to the only product sold by Harper Company. Sales price per unit...
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