Homework Answers
Answers
- Answer #16
>At break even level, there is neither any net income or net loss.
>Any no of unit less than that level will result in losses, and any no of units more than breakeven level will result in profit.
>The profit earned per unit will be equal to contribution margin per unit which is Sale price – Variable cost
= $ 22 - $ 10
= $ 12 per unit
>Correct Answer = Option ‘B’ $ 12.00 per unit - Answer #17
>At break even level, contribution margin = fixed expenses
>Hence, contribution margin for 20000 units = $ 180000
>Sale revenue for 20000 units = 20000 units x $ 20 = $ 400,000
>Variable cost for 20000 units = $ 400000 sales - $ 180000 contribution margin = $ 220,000
>Variable cost for 25000 units = ($220000 / 20000 units) x 25000 units
= $ 275,000
>Correct Answer = Option ‘C’ $ 275,000
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