Sarafine, Inc. sells a single product for $21. Variable costs are $7 per unit and fixed...

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Sarafine, Inc. sells a single product for $21. Variable costs are $7 per unit and fixed costs total $182,000 at a volume leve

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Answer 1

Answer #1

Answer: $273,000

Contribution margin per unit
	Sales per unit	$21	per unit
Less:	Variable cost per unit	$7	per unit
	Contribution margin	$14	per unit

.

Contribution margin ratio
Contribution margin per unt	/	Sales per unit	=	Contribution margin ratio
$14	/	$21	=	66.66666667%

.

Break-even sales in dollars
Numerator:	/	Denominator	=	Break-Even sales
Fixed costs	/	Contribution margin ratio	=	Break-Even sales
$182,000	/	66.666667%	=	$273,000

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Answer 2

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